<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 29, 1996
COMMISSION FILE NO. 1-8045
GENRAD, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1360950
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
300 BAKER AVENUE
CONCORD, MASSACHUSETTS 01742
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (508) 287-7000
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES /X/ NO / /
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S
CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
22,047,347 SHARES OF COMMON STOCK, $1 PAR VALUE, OUTSTANDING AUGUST 2,
1996.
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GENRAD, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION:
Consolidated Balance Sheet........................................1 - 2
Consolidated Statement of Operations..................................3
Consolidated Statement of Cash Flows..............................4 - 5
Notes to Consolidated Financial Statements........................6 - 7
Management's Discussion and Analysis of
Financial Condition and Results of Operation..................8 - 11
PART II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security Holders...........12
Item 6. Exhibits and Reports on Form 8-K..............................13
Signatures....................................................14
<PAGE> 3
PART I. FINANCIAL INFORMATION
GENRAD, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
June 29, December 30,
1996 1995
---------- -----------
<S> <C> <C>
Assets (Unaudited)
Current Assets:
Cash and equivalents $ 4,321 $ 9,064
Accounts receivable, net 49,391 41,284
Inventories:
Raw materials 11,167 9,399
Work in process 4,585 1,681
Finished goods 3,860 4,521
-------- -------
19,612 15,601
-------- -------
Other current assets 5,027 3,376
-------- -------
Total current assets 78,351 69,325
-------- -------
Property, Plant and Equipment:
Land 541 541
Buildings 24,667 25,098
Machinery and equipment 61,111 57,661
Service parts 15,041 14,568
-------- -------
101,360 97,868
Less: Accumulated depreciation 82,931 82,658
-------- -------
18,429 15,210
Deferred tax asset 2,480 -
Goodwill 4,403 -
Other assets 1,995 2,871
-------- -------
$105,658 $87,406
======== =======
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
1
<PAGE> 4
GENRAD, INC. AND SUBSIDIARIES
Consolidated Balance Sheet (continued)
(In thousands)
<TABLE>
<CAPTION>
June 29, December 30,
1996 1995
---------- -----------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Revolving lines of credit $ 4,012 $ 729
Trade accounts payable 6,362 7,743
Accrued liabilities 21,216 21,352
Accrued compensation and
employee benefits 7,064 9,816
Income taxes payable 1,603 742
Current portion long-term debt 607 24
--------- ---------
Total current liabilities 40,864 40,406
--------- ---------
Long-term Liabilities:
Long-term debt 50,759 49,073
Accrued pensions and benefits 11,312 11,969
Future lease costs of unused facilities 6,144 6,620
Other long-term liabilities 3,091 2,576
--------- ---------
Total long-term liabilities 71,306 70,238
--------- ---------
Stockholders' Equity (Deficit):
Common stock, $1 par value, 60,000,000
shares authorized; 22,031,000
and 21,232,000 issued and outstanding in
1996 and 1995, respectively 22,031 21,232
Additional paid-in capital 112,545 109,436
Accumulated deficit (138,462) (151,122)
Cumulative translation adjustment (2,626) (2,784)
--------- ---------
Total stockholders' equity (deficit) (6,512) (23,238)
--------- ---------
$ 105,658 $ 87,406
========= =========
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
2
<PAGE> 5
GENRAD, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- -------------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Sales of products $ 35,959 $ 32,541 $ 70,893 $ 61,223
Sales of services 9,209 9,197 17,829 17,755
----------- ----------- ----------- -----------
45,168 41,738 88,722 78,978
----------- ----------- ----------- -----------
Cost and expenses:
Cost of products sold 16,024 17,386 32,673 31,697
Cost of services sold 4,922 4,806 8,992 9,176
----------- ----------- ----------- -----------
20,946 22,192 41,665 40,873
----------- ----------- ----------- -----------
Gross margin 24,222 19,546 47,057 38,105
Operating expenses:
Selling, general and administrative 12,943 12,148 25,438 24,207
Research and development 4,088 3,666 8,469 7,311
Pension curtailment gain and
restructuring credit - - - (2,900)
----------- ----------- ----------- -----------
17,031 15,814 33,907 28,618
----------- ----------- ----------- -----------
Operating income 7,191 3,732 13,150 9,487
Other income (expense):
Interest, net (1,019) (987) (2,039) (1,945)
Other, net 16 106 48 185
----------- ----------- ----------- -----------
(1,003) (881) (1,991) (1,760)
----------- ----------- ----------- -----------
Income before income taxes 6,188 2,851 11,159 7,727
Income tax provision (benefit) 477 233 (1,501) 796
----------- ----------- ----------- -----------
Net Income $ 5,711 $ 2,618 $ 12,660 $ 6,931
=========== =========== =========== ===========
Earnings per common and common
equivalent shares:
Primary $ 0.24 $ 0.12 $ 0.54 $ 0.32
=========== =========== =========== ===========
Fully diluted $ 0.24 $ 0.12 $ 0.53 $ 0.31
=========== =========== =========== ===========
Shares used in computing earnings per
common and common equivalent shares:
Primary 23,981,000 21,890,000 23,570,000 21,415,000
=========== =========== =========== ===========
Fully diluted 24,160,000 22,151,000 23,940,000 22,060,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
3
<PAGE> 6
GENRAD, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
--------------------
June 29, July 1,
1996 1995
------- --------
<S> <C> <C>
Operating activities:
Net income $12,660 $ 6,931
Adjustments to reconcile net income
to net cash provided (used) by operating activities:
Depreciation and amortization 3,160 2,697
Reserve for future lease costs of unused facilities (992) (3,722)
Increase (decrease) resulting from changes
in operating assets and liabilities:
Accounts receivable (7,262) (8,387)
Inventories (4,551) 528
Prepaid expense (1,560) 1,276
Trade accounts payable (1,624) (2,178)
Accrued liabilities and customer prepayments 455 (1,386)
Accrued compensation and employee benefits (3,333) (2,290)
Income taxes 867 1,348
Deferred tax asset (2,480) -
Other, net (157) 669
------- -------
Net cash used in operating activities (4,817) (4,514)
------- -------
Investing activities:
Purchases of property, plant and equipment (3,907) (3,312)
Purchase of Test Technology Associates, Inc. (3,745) -
Proceeds from sale of property, plant and equipment 276 -
Proceeds from sale of assets held for sale - 3,157
------- -------
Net cash used in investing activities (7,376) (155)
------- -------
Financing activities:
Net change in long-term debt 14 112
Borrowings under revolving lines of credit 3,283 1,006
Proceeds from employee stock option exercises 3,908 1,105
------- -------
Net cash provided by financing activities 7,205 2,223
------- -------
Effects of exchange rates on cash 245 (229)
------- -------
Decrease in cash equivalents (4,743) (2,675)
Cash and equivalents at beginning of period 9,064 7,997
------- -------
Cash and equivalents at end of period $ 4,321 $ 5,322
======= ========
</TABLE>
The accompanying notes are an integral part
of these Consolidated Financial Statements.
4
<PAGE> 7
GENRAD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITY:
In conjunction with the purchase of Test Technology Associates, Inc. in the
first quarter of 1996, the Company has a minimum future obligation of $2.0
million which has been classified as current and long-term debt.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 8
GENRAD, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: ACCOUNTING COMMENTS
Reference is made to the Company's 1995 Annual Report and Form 10-K which
contains, at pages 7 through 34, financial statements and the notes thereto,
including a summary of significant accounting policies.
With respect to the financial information for the interim periods included in
this report, which is unaudited, the management of the Company believes that all
adjustments necessary for a fair presentation of the results for such interim
periods have been included. All adjustments are of a normal and recurring
nature.
Certain reclassifications have been made to the six months ended July 1, 1995
Consolidated Statement of Operations. Within operating expenses, the pension
curtailment gain of $1.9 million was reclassified from Selling, general and
administrative to Pension curtailment gain and restructuring credit.
The financial statements and all financial data contained herein have been
restated to include the acquisition of Mitron Corporation, as more fully
discussed in Note 2.
The results of any interim period are not necessarily indicative of the results
for the entire year.
NOTE 2: ACQUISITIONS
TEST TECHNOLOGY ASSOCIATES, INC.
On January 16, 1996, the Company acquired Test Technology Associates, Inc.
("TTA"). Pro forma results of operations have not been presented because the
effects of the acquisition were not significant. TTA provides custom test
programming, test fixture integration and other value-added services to
manufacturers and users of electronic products. TTA, established in 1982, is
located in Lewisville, Texas and Milpitas, California. In May 1996, TTA opened
an office in Westford, Massachusetts.
The acquisition was accounted for by the purchase method of accounting and was
funded through internally generated funds and short-term borrowings under the
Company's revolving credit with a bank. The results of TTA are included in the
1996 financial statements. The excess purchase price over the net assets
acquired is being amortized on a straight-line basis over the lesser of its
useful life or 10 years.
MITRON CORPORATION
On June 20, 1996, GenRad, Inc. acquired Mitron Corporation ("Mitron"), a
privately-held Oregon corporation, pursuant to the terms of an Agreement and
Plan of Merger dated June 5, 1996. Mitron is a developer of an integrated family
of software applications, tools and services for electronics manufacturing
including its CIMBridge[Registered Trademark] software applications. The
products enable users to collect electronics manufacturing data for greater
control, shorter time-to-market and lower costs.
6
<PAGE> 9
In connection with the merger, 1,196,146 shares of GenRad Common Stock were
issued in exchange for all outstanding shares of Mitron Common Stock. Options to
purchase 107,467 additional shares of GenRad Common Stock were issued in
conjunction with the merger.
The merger was accounted for as a pooling-of-interests, and accordingly, the
consolidated financial statements and all financial data contained herein have
been restated to include the accounts of Mitron for all periods presented.
Merger costs were insignificant and were expensed in the second quarter of 1996.
The following information shows revenue and net income for the separate
companies during the periods indicated.
<TABLE>
<CAPTION>
(In thousands) THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------------------------------------------
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
-------------------------------------------------------------
<S> <C> <C> <C> <C>
NET REVENUE:
GenRad $43,518 $40,595 $85,698 $76,434
Mitron 1,650 1,143 3,024 2,544
-------------------------------------------------------------
$45,168 $41,738 $88,722 $78,978
=============================================================
NET INCOME:
GenRad $ 5,617 $ 2,794 $12,550 $ 6,992
Mitron 94 (176) 110 (61)
-------------------------------------------------------------
$ 5,711 $ 2,618 $12,660 $ 6,931
=============================================================
</TABLE>
Additional description of the merger and the Merger Agreement is contained on
the Company's Current Report on Form 8-K dated June 20, 1996 as filed with the
Securities and Exchange Commission.
NOTE 3. SUBSEQUENT EVENTS
On July 26, 1996, the Company entered into a 15 year lease to relocate its
corporate headquarters and domestic manufacturing facility to Westford,
Massachusetts. The lease is expected to begin in April 1997, the estimated
completion of the construction of the buildings. The future minimum commitment
for the noncancellable operating lease is $36.3 million.
7
<PAGE> 10
GENRAD, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
Orders for the Company's products and services increased to $43.2 million for
the three months and increased to $91.4 million for the six months ended June
29, 1996 from $36.3 million and $75.9 million, respectively, for the comparable
periods in 1995. The increase in orders both between the quarters and between
the comparable six month periods was experienced as a result of incremental
orders associated with the acquisition of TTA and was experienced across all
markets and geographies with the most significant contributors coming from
contract manufacturing, computer manufacturers, diagnostic customers and major
transportation companies.
Backlog at the end of the 1996 second quarter was $30.0 million compared to
$26.3 million at year-end 1995 and $28.5 million at the end of the 1995 second
quarter. The 1995 second quarter backlog includes $2.6 million related to the
U.S. Marine Corps for which the related revenues were recognized in fiscal 1995.
The Company believes that a substantial portion of the 1996 second quarter
backlog will be shipped prior to the end of 1996.
Net product and service revenues were $45.2 million for the three months and
$88.7 million for the six months ended June 29, 1996, as compared to $41.7
million and $79.0 million, respectively, for the same periods in 1995. The
increase between quarters and the six month periods is due to increased sales in
Board Test and Advanced Diagnostic Solutions (ADS); a new product release; and
incremental revenues associated with the acquisition of TTA completed in the
first quarter of 1996. Revenues from the U.S. Marine Corps were $3.9 million and
$2.3 million for the first and second quarter of 1995, respectively. Revenues
derived from international markets accounted for 54.6% and 58.3% for the three
and six months ended June 29, 1996, as compared to 59.0% and 55.5% for the
similar periods in 1995.
Gross margin as a percent of revenues increased to 53.6% for the three months
and increased to 53.0% for the six months ended June 29, 1996, as compared to
46.8% and 48.2%, respectively, for the same periods in 1995. Margin improvements
resulted from a combination of improved product mix for manufacturing systems,
continued improvements in manufacturing costs and efficiencies and a reduction
of warranty costs.
Selling, general and administrative expenses increased for the three and six
month periods ended June 29, 1996 to $12.9 million and $25.4 million,
respectively, from $12.1 million and $24.2 million in the comparable periods of
1995. The increase in expense for the three and six month periods in 1996 as
compared to 1995 is due primarily to the acquisition of TTA in the first quarter
of 1996 and increased commission costs related to the increase in overall
revenues.
Research and development expenses increased for the three and six month periods
ended June 29, 1996 to $4.1 million and $8.5 million, respectively, from $3.7
million and $7.3 million in the comparable periods of 1995. The increases are
attributable to increased product offerings and continued investment in software
development across all product lines.
8
<PAGE> 11
As a percentage of net product and service revenues, research and development
expenses increased slightly for the three and six month periods ended June 29,
1996 to 9.1% and 9.5%, respectively, from 8.8% and 9.3% in the comparable
periods of 1995. The Company continues to invest in research, new product
development and enhancements to existing products.
Net interest expense remained virtually unchanged in the three and six months
ended June 29, 1996 as compared to the comparable periods in 1995.
The net income tax benefit of $1.5 million for the six months ended June 29,
1996 includes a benefit of $2.5 million from the reduction in the valuation
allowance for deferred taxes which was recognized in the first quarter of 1996.
Excluding the $2.5 million, the income tax provision of $1.0 million for the
six months ended June 29, 1996 increased from $0.8 million in the comparable
period in 1995 due to an increased level of estimated foreign taxable income.
The 1996 income tax provision represents foreign and state income taxes.
Due to management's improved expectations of future income and expected
utilization of the Company's domestic net operating loss carryforwards, net
income for the first quarter of 1996 includes the benefit of a reduction in the
valuation allowance for deferred assets of $2.5 million. At June 29, 1996, the
Company had a gross deferred tax asset of approximately $74.3 million with a
valuation allowance of approximately $70.0 million. Management will continue to
assess the realizability of the deferred tax asset based on actual and
forecasted operating results.
As a result of the above, the Company reported net income of $5.7 million for
three months and $12.7 million for the six months ended June 29, 1996 as
compared to net income of $2.6 million and $6.9 million, respectively, for the
comparable periods in 1995.
LIQUIDITY AND SOURCES OF CAPITAL
Cash and equivalents decreased $4.7 million for the six months ended June 29,
1996 as compared to a decrease of $2.7 million for the comparable period in
1995.
In the six months ended June 29, 1996, net income provided $12.7 million which
included a $2.5 million non-cash benefit resulting from the deferred tax asset
that was recorded in the first quarter of 1996.
Increases in accounts receivable and inventory used cash of $7.3 million and
$4.6 million, respectively, for the six months ended June 29, 1996. Inventory
levels have increased due to new product offerings and increased revenues. The
increase in accounts receivables is attributable to the timing of shipments and
increased revenues.
Capital expenditures for the six months ended June 29, 1996 totaled $3.9 million
as compared to $3.3 million in the comparable period in 1995. Additions to
property, plant and equipment for both periods were primarily for equipment used
in research and development and manufacturing.
9
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND SOURCES OF CAPITAL (CONTINUED)
The acquisition of TTA used $3.7 million in cash in the first quarter of 1996,
while the proceeds from stock option exercises generated $3.9 million of cash
for the six months ended June 29, 1996.
The Company's primary source of liquidity is internally generated funds. The
Company also has existing available secured lines of credit up to $15.0 million,
against which there were $4.0 million in borrowings outstanding on June 29,
1996. The U.S. credit facility was entered into in June 1992 and expires on
December 31, 1996. The total U.S. available credit line is $12.8 million and is
secured by all of the Company's domestic assets. The total U.K. available credit
line of $2.2 million is payable on demand and is secured by all of the Company's
U.K. assets. Management is in the process of securing new lines of credit and
anticipates that the necessary financing will be in place by the end of fiscal
1996. Borrowings under the credit facilities are subject to compliance with
specified financial and operating covenants.
The terms of the Company's 7 1/4% Convertible Subordinated Debentures require
the Company to make annual sinking fund payments of $2.875 million commencing in
May 1996. As a result of the Company having repurchased $7.5 million of the
Debentures during 1990, the Company intends to use the previous repurchase in
lieu of sinking fund payments and defer the initiation of such payments until
1998.
In 1996, the Company anticipates it will fund its working capital and capital
expenditure requirements, make interest payments on its convertible debentures
and other borrowings and meet its other cash obligations from internally
generated funds and available credit facilities. If there is a significant
reduction in internally generated funds or available credit facilities, the
Company may require significant funds from outside financing sources. In such an
event, there can be no assurance that the Company would be able to obtain such
funding as and when required, or on acceptable terms.
The Company buys and sells foreign currencies using forward contracts intended
to hedge payables and receivables denominated in foreign currencies. The Company
primarily trades in U.S. dollars and European currencies. At June 29, 1996, the
Company had forward exchange contracts to sell approximately $16.2 million of
foreign currencies.
Inflation during the periods presented did not have a significant effect on the
operations of the Company. The Company attempts to mitigate inflationary cost
increases by continuously improving manufacturing methods and technologies.
10
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report contains certain forward-looking statements which involve
risks and uncertainties. The Company's actual results may differ significantly
from the results discussed in the forward-looking statements. Factors that might
cause such a difference include, but are not limited to those discussed below.
The Company's future operating results are dependent upon the Company's ability
to develop, manufacture and market technologically innovative products that meet
customers needs, fund its working capital, capital expenditure and financing
requirements and meet its cash obligations, including those arising from past
restructurings.
The market for the Company's products is characterized by rapid technological
change, evolving industry standards, changes in customers needs, and frequent
new product introductions and is therefore highly dependent on timely product
innovation. Competition in the markets in which the Company operates is intense.
The introduction by the Company or its competitors of products embodying new
technology or the emergence of new industry standards or practices could render
the Company's existing products obsolete or otherwise unmarketable. The
Company's ability to develop and market products and services that successfully
meet changing market needs will impact future results. A portion of future
revenues will come from new products and services. The Company cannot determine
the ultimate effect that new products and services will have on revenues,
earnings and stock price.
Although margins continue to be impacted by competitive pricing pressures, the
Company's manufacturing costs have decreased due to engineered cost reductions.
The Company is dependent upon a number of suppliers for several key components
of its products. The loss of certain of the Company's suppliers or substantial
price increases imposed by suppliers could have a material adverse effect on the
Company.
The Company is exposed to risks inherent in international trade and operations
as a result of its international sales and the operation of its manufacturing
facility in Manchester, England. Such trade and operations expose the Company to
continuing risks such as unpredictable and potentially inconsistent regulatory
requirements, political and economic changes, tariffs or other trade
restrictions, transportation delays, foreign currency fluctuations and labor
disruptions.
The Company may be subject to patent or product liability claims in the future.
A successful claim brought against the Company in excess of available insurance
coverage or any claim that results in significant adverse publicity may have a
material adverse effect on the Company's competitive position, financial
condition, results of operations or liquidity. In the opinion of management, the
amount of ultimate liability with respect to any pending legal proceedings will
not materially affect the results of operations or the financial position of the
Company.
11
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(A) The Annual Meeting of Shareholders of GenRad, Inc. was held on May 9,
1996 (the "Annual Meeting").
(B) Not required pursuant to Instruction No. 3.
<TABLE>
(C) Votes were cast or withheld in connection with the election of directors
at the Annual Meeting as follows:
<CAPTION>
NAME OF DIRECTOR FOR WITHHELD
---------------- --- --------
<S> <C> <C>
Russell A. Gullotti 15,744,865 188,182
William G. Scheerer 15,746,187 186,860
</TABLE>
<TABLE>
Votes were cast or withheld in connection with the following proposals,
more fully described in the Company's Proxy Statement dated April 8, 1996,
at the Annual Meeting:
<CAPTION>
AFFIRMATIVE NEGATIVE NOT
VOTES VOTES ABSTAINED VOTED
----------- -------- --------- -----
<S> <C> <C> <C> <C>
1) To amend the Company's 1991
Equity Incentive Plan by
increasing by 920,000 the shares,
of Common Stock available for
issuance thereunder, which shares
had been granted under options to
four officers of the Company. 9,317,904 2,338,726 197,491 4,078,926
2) To amend the Company's 1991
Incentive Plan by increasing
by 830,000 the shares of Common
Stock available for issuance
thereunder. 9,458,993 2,199,367 195,761 4,078,926
3) To amend the Company's 1994
Director Restricted Stock Plan
by increasing the size of the
annual award to non-employee
directors from 1,500 shares to
2,500 shares of Common Stock,
and by making certain other
changes. 13,808,942 1,905,694 218,411 -
</TABLE>
12
<PAGE> 15
PART II. OTHER INFORMATION (CONTINUED)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 2. The Agreement and Plan of Merger by and among GenRad, Inc., GenRad
Acquisition Corporation and Mitron Corporation dated June 5, 1996
(incorporated by reference to the Company's Current Report on
Form 8-K dated June 20, 1996 as filed with the Securities and
Exchange Commission).
10. Lease Agreement dated July 26, 1996 between GenRad, Inc.
and Michelson Farm - Westford Technology Park Trust.
11. Statement re: Computation of Earnings Per Share.
27. Financial Data Schedule.
(b) The Company filed a Current Report on Form 8-K dated June 20, 1996
with the Securities and Exchange Commission reporting the acquisition
of Mitron.
13
<PAGE> 16
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 thereunto duly authorized.
GENRAD, INC.
BY: /s/ DANIEL F. HARRINGTON
--------------------------------------
DANIEL F. HARRINGTON
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER AND SECRETARY
Date: August 13, 1996
14
<PAGE> 1
TABLE OF CONTENTS
TO THE
LEASE OF BUILDING 5
MICHELSON FARM-WESTFORD TECHNOLOGY PARK
PAGE
ARTICLE I TERMS DEFINED...................................... l
ARTICLE II DESCRIPTION OF PREMISES............................ 4
ARTICLE III TERM............................................... 6
ARTICLE IV RENT............................................... 8
ARTICLE V OPERATING AND MAINTENANCE COSTS AND
REAL ESTATE TAXES.................................. 13
ARTICLE VI LANDLORD'S COVENANTS............................... 25
ARTICLE VII LANDLORD'S WARRANTIES AND REPRESENTATIONS.......... 30
ARTICLE VIII USE OF PREMISES.................................... 35
ARTICLE IX PREPARATION OF PREMISES............................ 36
ARTICLE X COMPLIANCE WITH LAW................................ 61
ARTICLE XI ALTERATIONS, ADDITIONS AND IMPROVEMENTS............ 62
ARTICLE XII TENANT'S COVENANTS................................. 68
ARTICLE XIII CASUALTY AND CONDEMNATION.......................... 76
ARTICLE XIV RIGHTS OF MORTGAGEE................................ 85
ARTICLE XV INSURANCE.......................................... 89
ARTICLE XVI INDEMNIFICATION.................................... 93
ARTICLE XVII ASSIGNMENT AND SUBLETTING.......................... 96
ARTICLE XVIII TENANT'S PROPERTY.................................. 100
ARTICLE XIX TENANT'S DEFAULT................................... 101
ARTICLE XX NOTICES............................................ 104
ARTICLE XXI QUIET ENJOYMENT.................................... 105
ARTICLE XXII HOLDING OVER....................................... 106
ARTICLE XXIII MEMORANDUM OF LEASE................................ 107
ARTICLE XXIV SURRENDER OF PREMISES.............................. 107
ARTICLE XXV ESTOPPEL CERTIFICATES.............................. 108
ARTICLE XXVI ADDITIONAL PROVISIONS.............................. 108
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MICHELSON FARM-WESTFORD TECHNOLOGY PARK
LEASE
Lease of Building 5
Dated for reference purposes as of: July 26, 1996
ARTICLE I
TERMS DEFINED
1.1. Subjects referred to: Each reference in this Lease to any
of the following terms shall mean:
LANDLORD:
Arturo J. Gutierrez and John A. Cataldo, as Class A Trustees, and John Pike and
Thomas E. Leggat, as Class B Trustees, as trustees of Michelson Farm-Westford
Technology Park Trust, u/d/t dated October 1, 1984 and recorded with the
Middlesex North Registry of Deeds in Book 2863, Page 235
MANAGING AGENT: The Gutierrez Company
LANDLORD'S & MANAGING AGENT'S ADDRESS:
c/o The Gutierrez Company
One Wall Street
Burlington, MA 01803
LANDLORD'S REPRESENTATIVE: John A. Cataldo
LANDLORD'S CONSTRUCTION REPRESENTATIVES: Arturo J. Gutierrez,
John A. Cataldo, P. Agustin
Rios or Dennis G. Bailey
TENANT: GenRad, Inc.
TENANT'S ADDRESS (FOR NOTICE AND BILLING):
GenRad, Inc.
300 Baker Avenue
Concord, MA 01742-2174
Attn: Daniel F. Harrington
With a Copy to:
GenRad, Inc.
300 Baker Avenue
Concord, MA 01742-2174
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Attn: Walter A. Shephard
TENANT'S REPRESENTATIVES: Daniel F. Harrington or Walter A. Shephard
TENANT'S CONSTRUCTION REPRESENTATIVES: Daniel F. Harrington
or Walter A. Shephard
BUILDING: Building 5 - 130,000 gross square feet - to be constructed on the lot
(the "Lot") as shown on Exhibit "A" in accordance with the Plans and Outline
Specifications attached as Exhibits "B-1" and "B- 2", respectively, and any
replacements thereof and any alterations and additions thereto, including the
Tenant's Work (as hereinafter defined).
SCHEDULED TERM COMMENCEMENT DATE: April 28, 1997
OUTSIDE DELIVERY DATE: Per Section 9.2
TERM EXPIRATION DATE: Fifteen (15)
Years following the Term Commencement Date as determined
in accordance with Section 9.2 of this Lease
FIXED RENT: Years 1-5: $1,249,300.00/Year; $104,108.33/Month
Years 6-10: $1,436,695.00/Year; $119,724.58/Month
Years 11-15: $1,652,199.25/Year; $137,683.27/Month
SPECIAL PROVISIONS:
Option to Extend: Section 3.2
Right of First Offer: Section 26.5
ESTIMATED ANNUAL TENANT'S PROPORTIONAL SHARE OF COMMON AREA
MAINTENANCE (YEAR ENDING DECEMBER 31, 1997): $88,400.00/Year
$ 7,366.67/Month
FISCAL YEAR 1997 ESTIMATED
REAL ESTATE TAXES: $80,000.00
PERMITTED USES: General office; light manufacturing and assembly; laboratory;
research and development.
PREMISES: The Building and the areas which are the subject of all appurtenant
rights and easements set forth or referred to in Sections 2.1 and 26.11 of this
Lease.
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1.2. The exhibits listed below in this Section are incorporated in this
Lease by reference and are to be construed as part of this Lease:
Exhibit "A" Plans showing the Lot and the Office Park and Plan of
Common Easements of the Office Park
Exhibit "B-1" Preliminary Base Building Plans
Exhibit "B-2" Outline Specifications
Exhibit "C" Intentionally Deleted
Exhibit "D-1" Form of Certificate of Substantial Completion
Exhibit "D-2" Form of Certificate of Final Completion
Exhibit "E" Intentionally Deleted
Exhibit "F" Rules and Regulations
Exhibit "G" Office Park Covenants
Exhibit "H" Intentionally Deleted
Exhibit "I" Estoppel Certificate
Exhibit "J" Subordination, Non-Disturbance and Attornment
Agreement
Exhibit "K" Budget
Exhibit "L" Form of Work Change Order
Exhibit "M" Definition of Cost of the Work
Exhibit "N" Intentionally Deleted
Exhibit "O" Permitted Encumbrances
Exhibit "P" Landlord's Warranties
Exhibit "Q" Alterations Calculation
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ARTICLE II
DESCRIPTION OF PREMISES
2.1. DEMISE OF PREMISES. In consideration of the rents and covenants
herein stipulated to be paid and performed and upon the terms and conditions
hereinafter specified, Landlord hereby demises and lets to Tenant, and Tenant
hereby leases from Landlord, for the respective terms hereinafter described, the
Premises as described in Article I hereof, which Premises include the
appurtenances described below.
Tenant shall have, as appurtenant to the Building, the right to use in
common with others entitled thereto, subject to reasonable rules and regulations
of general applicability to tenants and owners of other lots in Michelson
Farm-Westford Technology Park (the "Office Park") from time to time made by
Landlord of which Tenant is given notice: all common areas (the "Common Areas")
shown on the Plan of Common Easements of the Office Park attached as part of
Exhibit "A", including, without limitation, all rights to access, use of all
service areas, use of all utility lines including those for electricity, water,
gas and sewage disposal, use of the Office Park sewage treatment plant, use of
all facilities for drainage of surface water runoff, including storm drainage
systems and detention areas, use of all grades, driveways, sidewalks and
footways, lighting systems and traffic flow patterns and, if any, all parking
areas
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designated as common or visitors parking areas for use of the entire Office
Park, including, without limitation, all rights appurtenant to the Lot and the
Building created in the Deed to Landlord.
In addition, the Tenant shall have, as appurtenant to the Building, the
exclusive right and easement with respect to the Lot (i) to use all improvements
thereon including, without limitation, all parking areas, loading areas, service
areas and the like, (ii) to use all means of access to and from the Building to
the Common Areas, including, without limitation, all sidewalks, driveways,
grades, roads and the like (iii) to use all utility lines, electricity, water
and sewage disposal, and (iv) to use all facilities for drainage of surface
water runoff; all of the foregoing rights being subject to reasonable rules and
regulations of general applicability to Tenant and other owners of lots in the
Office Park from time to time made by Landlord of which Tenant is given notice.
Notwithstanding the foregoing provisions, Tenant's rights with respect to (i)
the driveway to be constructed by Landlord along the southerly portion of the
Lot (and all utilities therein) as shown on Exhibit "A" as the "Proposed
Driveway Easement on Lot 6B", and (ii) the easement shown on Exhibit "A" as the
"Emergency Access Easement on Lot 8" shall be non-exclusive.
With respect to the northwesterly, easterly and southeasterly portions
of the Lot which do not contain either
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the Building, parking areas or other paved surfaces, (hereinafter the "Open
Space"), Tenant shall have the right to use the Open Space for recreational
activities, telecommunications equipment and similar purposes, provided that
such activities (a) are permitted as of right under applicable building and
zoning laws and (b) have been approved in advance in writing by Landlord, in its
reasonable discretion, based upon compliance with the Rules and Regulations and
the Office Park Covenants attached hereto as Exhibits "F" and "G", respectively,
and as being consistent with the overall appearance and character of the Office
Park.
ARTICLE III
TERM
3.1. ORIGINAL TERM. The term (the "Term") of this Lease shall commence
on the Term Commencement Date determined in accordance with Section 9.2 of this
Lease and shall expire on the Term Expiration Date, unless same is terminated
pursuant to Articles IX and XIII, or unless extended pursuant to Section 3.2.
3.2. EXTENDED TERMS. The Tenant has the option to extend this Lease for
two (2) successive five (5) year terms ("Extended Terms", and separately the
"First Extended Term" and the "Second Extended Term"), the exercise of each of
which shall automatically extend the term of this Lease without the
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necessity of additional documentation. So long as there does not exist any Event
of Default hereunder at such time, the options to extend shall be deemed to have
been exercised as to the First Extended Term by Tenant's notification to
Landlord that it elects to exercise its first option to extend at least twelve
(12) months but not more than eighteen (18) months prior to the end of the
initial Term hereunder, and as to the Second Extended Term, by Tenant's
notification to Landlord that it elects to exercise its second option to extend
at least twelve (12) months but not more than eighteen (18) months prior to the
end of the First Extended Term.
Each Extended Term shall be upon the same terms and conditions as are
set forth in this Lease, including, without limitation, the Tenant's obligations
to pay real estate taxes, common area maintenance and insurance, except that (i)
there shall be no additional option to extend after the termination of the
Second Extended Term or the failure to exercise the first option, whichever
shall first occur, and (ii) the annual Fixed Rent for the First Extended Term
shall be equal to ninety-five (95%) percent of the then Market Rent (as
hereinafter defined in Section 4.3) and (iii) the annual Fixed Rent for the
Second Extended Term shall be equal to ninety-five (95%) of the then Market Rent
(as hereinafter defined in said Section 4.3). In no event, however, shall (a)
the annual Fixed Rent for the First Extended Term be less than the annual Fixed
Rent set forth
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herein, and (b) the annual Fixed Rent for the Second Extended Term be less than
the annual Fixed Rent for the First Extended Term. Landlord shall, within
fifteen (15) days of receipt of notice of Tenant's election to extend the Term
of this Lease, provide Tenant with notice of Market Rent in accordance with the
provisions of Section 4.3. Landlord and Tenant shall, in accordance with the
provisions of Section 4.3 hereof, establish the Market Rent for the Extended
Terms.
ARTICLE IV
RENT
4.1. FIXED RENT. The Fixed Rent for the Premises during the Term shall
be as set forth in Article I of this Lease and shall be payable on the first day
of each month during the Term hereof in equal monthly installments, also as set
forth in said Article, except that the rent for any portion of a calendar month
during the Term hereof shall be apportioned for such portion. Rental payments
shall be made at the address set forth in Article I of this Lease or at such
other address as Landlord may from time to time designate in writing. All other
payments required by this Lease to be made by Tenant during the Term thereof as
additional rent shall be paid as elsewhere in this Lease set forth. The term
"Annual Rent" shall mean Fixed Rent plus additional rent payable under the
Lease. All rent payable
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by Tenant pursuant to this Lease shall be paid without setoff, adjustment,
deduction or abatement except as expressly set forth in Article XIII, Section
9.2, and in Section 26.13 hereof.
4.2 PAYMENTS. All payments of Annual Rent shall be made to the Managing
Agent set forth in Section 1.1 hereof, or to such other person as Landlord may
from time to time designate. If any installment of Annual Rent is paid more than
five (5) business days after written notice from Landlord that such rent has not
been paid, it shall bear interest at a rate equal to the prime commercial rate
from time to time established by the Fleet National Bank, or such other major
national bank, as Landlord elects, plus four (4%) per annum from such due date,
which such interest shall be immediately due and payable hereunder as further
additional rent.
4.3. MARKET RENT. The market rent for the Premises shall be the then
fair market rent for similar space in similar office parks in the Towns of
Westford, Chelmsford and Billerica, which such rent (the "Market Rent") shall be
determined as follows:
(a) The Market Rent shall be proposed by Landlord within thirty (30)
days of receipt of Tenant's notice that it intends to exercise its option to
extend the term as specified in Section 3.2 hereof (the "Landlord's Proposed
Market Rent"). The Landlord's Proposed Market Rent shall be the Market Rent
unless Tenant notifies Landlord, within fifteen (15) business days of Tenant's
receipt of Landlord's Proposed Market Rent, that
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Landlord's Proposed Market Rent is not satisfactory to Tenant ("Tenant's
Rejection Notice").
(b) If the Market Rent is not otherwise agreed upon by Landlord and
Tenant within fifteen (15) business days after Landlord's receipt of Tenant's
Rejection Notice, then the Market Rent shall be determined by the following
appraisal procedure:
1. Landlord and Tenant shall, within five (5) days following the
expiration of said fifteen (15) day period, each designate one (1)
appraiser and shall notify each other of the name and address of
the appraiser whom they have designated. Such two (2) appraisers
shall, within twenty (20) days after the designation of the second
appraiser, make their determinations of the Market Rent in writing
and give notice thereof to each other and to Landlord and Tenant.
Such two (2) appraisers shall have twenty (20) days after the
receipt of notice of each other's determination to confer with each
other and to attempt to reach agreement as to the determination of
the Market Rent. If such appraisers shall concur in such
determination, they shall give notice thereof to Landlord and
Tenant and such concurrence shall be final and binding upon
Landlord and Tenant. If such appraisers shall fail to concur as to
such determination within said twenty (20) day period, they
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shall give notice thereof to Landlord and Tenant and shall
immediately designate a third appraiser. If the two appraisers
shall fail to agree upon the designation of such third appraiser
within five (5) days after said twenty (20) day period, then they
or either of them shall give notice of such failure to agree to
Landlord and Tenant and if Landlord and Tenant fail to agree upon
the selection of such third appraiser within five (5) days after
the appraiser(s) appointed by the parties give notice as aforesaid,
then either party on behalf of both may apply to the Greater Boston
Real Estate Board or any successor thereto, or on his or her
failure, refusal or inability to act, to the American Arbitration
Association or to a court of competent jurisdiction, for the
designation of such third appraiser.
2. All appraisers shall be real estate appraisers or consultants
who shall have had at least seven (7) years continuous experience in the
business of appraising real estate in the suburban Boston area.
3. The third appraiser shall conduct such hearings and
investigations as he or she may deem appropriate and shall, within fifteen (15)
days after the date of his or her designation, make an independent determination
of the Market Rent.
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4. If none of the determinations of the appraisers varies from the
mean of the determinations of the other appraisers by more than ten
(10%) percent, the mean of the determinations of the three (3)
appraisers shall be the Market Rent for the Premises. If, on the
other hand, the determination of any single appraiser varies from
the mean of the determinations of the other two (2) appraisers by
more than ten (10%) percent, the mean of the determination of the
two (2) appraisers whose determinations are closest shall be the
Market Rent.
5. The determination of the appraisers, as provided above, shall be
conclusive upon the parties and shall have the same force and
effect as a judgment made in a court of competent jurisdiction.
6. Each party shall pay the fees, costs and expenses of the
appraiser selected by it, its own counsel fees, and one-half (1/2)
of all other expenses and fees of any such third appraisal.
Notwithstanding the foregoing Section 4.3, Annual Rent shall never, except as
provided in Articles IX and XIII, be less than that stated in Section 1.1 and
stated in Section 3.2.
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ARTICLE V
OPERATING AND MAINTENANCE COSTS AND REAL ESTATE TAXES
5.1. COMMON AREA MAINTENANCE. Tenant shall pay to Landlord as
additional rent an additional payment on the first day of each month occurring
during the Term hereof one-twelfth (1/12) of the amount of estimated annual
tenant's proportional share of common area maintenance, which such initial
amount for the year ending December 31, 1997 is set forth in Section 1.1
("Tenant's CAM Fund"). The initial payments for 1997 will be based on the budget
attached hereto as Exhibit "K", which may, however, be adjusted as provided in
this Section 5.1 or as a result of actual experience during such initial or any
subsequent calendar years. Such fund is intended to reimburse Landlord with
Tenant's allocable share of certain costs related to the Premises, the Lot, and
the common areas of the Office Park as hereinafter set forth. The common area
maintenance costs included within Tenant's CAM Fund with respect to the
Building, Lot and the exterior areas of the Premises and the Common Areas shall
be categorized in one of the following categories and prorated in accordance
with the prorations set forth within each category:
1. Building Related Expenses, which shall be allocated 100% to
Tenant, shall include the annual charge (i.e. Landlord's cost of
the capital items divided by the
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useful life in years of such capital items) for any capital
items purchased by Landlord for such maintenance, repairs and
replacements in accordance with the provisions of Section 6.1,
specifically excluding any amounts attributable to the
Landlord's structural obligations set forth in said Section 6.1;
insurance premiums, if the Landlord procures, on Tenant's
behalf, such insurance specified in Article XV hereof; routine
maintenance and repair of sewer lines exclusively serving the
Lot, utility, fire main and fire hydrant facilities, and
drainage facilities exclusively serving the Building; routine
maintenance of Building entrance sign; routine maintenance,
repair and striping of Tenant's exclusive parking and loading
areas, including snow removal and sanding of driveways and
parking lots; fertilization, mowing and watering of lawn and
landscaping and care of shrubbery and general grounds upkeep;
changing of street-lamp lights, walkway lights, and parking
lights, and keeping same in proper condition; and any other
commercially reasonable and customary services, repairs or
maintenance performed solely for the benefit of the Building;
2. Traffic Related Expenses, which shall be allocated on the basis
of the ratio of the number of parking spaces on the Lot to the
aggregate total number of parking
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spaces within the Office Park, shall include snow removal and
sanding of common Office Park drives and parking lots, if any,
maintenance and repair of the Office Park entrance signs,
maintenance and repair of Office Park lighting, traffic signals,
and traffic control personnel required for the Office Park,
maintenance and repair of Office Park walks, and Office Park
non-exclusive parking, if any, and any other traffic or common
Office Park roadway or walk-way related expenses; provided,
however, that with respect to the cost of real estate taxes on
those portions of the Common Areas of the Office Park which are
common roadways or driveways, with respect to the costs of snow
removal and sanding and with respect to maintenance of traffic
signals and traffic control personnel, such costs shall be
allocated by Landlord on a reasonable basis taking into
consideration the ratio which Tenant's pro-rata share of parking
spaces bears to the total number of parking spaces in the Office
Park, the usage of the common roadways, common driveways and the
necessity of additional snow removal and sanding due to overtime
and weekend use of certain buildings within the Office Park, and
such other pertinent factors as reasonably determined by
Landlord;
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3. Office Park Landscaping/Drainage/Other General Office Park
Related Expenses, which are categorized in Exhibit "K" attached
hereto, shall be allocated on the basis of the ratio of the
square footage of the Building to the aggregate square footage
of all completed buildings including the Building in the Office
Park, as such buildings are completed from time to time, shall
consist of the maintenance and repair of sewer, utilities, and
drainage facilities, maintenance and repair of detention and
fire main and fire hydrant facilities which service the Office
Park and are not exclusive to any single building within the
Office Park; fertilization, mowing, and watering of lawns and
landscaping and care of shrubbery and general grounds upkeep of
access drives, entrance areas and other such portions of the
Office Park; and liability insurance costs, other than insurance
required to be maintained by Tenant or Landlord, on behalf of
Tenant, on the Premises and the Lot as specified in Article XV
hereof, for the Common Areas of the Office Park, Landlord and
Tenant agreeing that all of the foregoing Office Park related
services being allocated hereunder are to be commercially
reasonable and customary;
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4. Sewer Treatment Plant Expenses, including real estate taxes
associated with the land and building or buildings of the sewer
treatment plant (including any sewer treatment plant capital
expenditures, so long as the same are amortized over the useful
life of the improvements and similarly are reimbursed by other
tenants within the Office Park), shall consist of the expenses
of operating, maintaining and repairing the sewage treatment
plant, which expenses shall be allocated on the basis of the
ratio of the square footage of the Building to the aggregate
square footage of all completed buildings, including the
Building, on all lots in the Office Park, as such buildings are
completed and connected for service from time to time to the
sewer treatment plant; provided, however, that such costs shall
be re-allocated by Landlord on a reasonable basis taking into
consideration the usage of large quantities of water by
particular tenants in the Office Park, and such other pertinent
factors as reasonably determined by Landlord.
Notwithstanding anything to the contrary in this Lease contained, Tenant shall
not be required to pay any Common Area Maintenance Costs or to contribute to
Tenant's CAM Fund for:
1. Repairs which are the responsibility of the Landlord, including
structural repairs (i.e., repairs of the
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structural integrity of the exterior precast concrete panels of
the Building, the foundations and the roof), as well as repairs
or other work occasioned by fire or other casualty or by the
exercise of eminent domain or any work required for Landlord to
comply with its construction guarantees or its obligations to
have the Premises in compliance with the law as set forth in
Section 10.1;
2. Leasing commissions, attorneys' fees, costs and disbursements
and other expenses incurred in connection with negotiations or
disputes with other tenants, occupants or prospective tenants or
occupants of the Building or Office Park;
3. Interest, principal, ground rent, or other payments under any
mortgage, ground lease or other financing of the Lot, the Office
Park or the sewage treatment plant (including the purchase price
if and when Landlord acquires a fee interest in the land upon
which such plant is located);
4. Any advertising or promotional expenditures;
5. Depreciation or amortization;
6. Services or work provided for other tenants and occupants of the
Building or Office Park and not substantially benefiting Tenant
on a commensurate basis and any expense for which Landlord is
entitled to be
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reimbursed directly by any such other tenant or tenants;
7. Overhead or profit increment paid to subsidiaries or affiliates
of Landlord for services on or to the Premises or for the Office
Park to the extent that the costs of such services exceed market
rate, competitive costs of such services were they not so
rendered by a subsidiary or affiliate;
8. Management fees to the Management Agent specified in Section 1.1
hereof in excess of ten percent (10%) of the annual amount of
Tenant's CAM Fund, which such initial payments are set forth in
Exhibit "K" attached hereto; and
9. Off-site traffic improvements.
Tenant recognizes that Landlord may retain the services of such independent
contractors or affiliates as may be necessary for Landlord to fulfill its
obligations hereunder, and Landlord agrees that all such services will be
obtained by Landlord at commercially reasonable, market rates. Landlord shall
provide to Tenant, within four months of the end of each calendar year, an
annual accounting, in writing, of actual charges. In addition, Landlord shall
maintain complete books and records sufficient to verify these charges. Tenant,
its accountants and agents shall have access to such books and records at
reasonable times with prior written notice.
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If Tenant's CAM Fund was not fully spent, Landlord shall, within
fifteen (15) business days after Landlord provides Tenant such accounting or, as
applicable, after Tenant has provided Landlord with notice of additional rebate
amounts due pursuant to Tenant's audit of such accounting, rebate to Tenant all
unspent funds. If Tenant's CAM Fund was insufficient to pay such charges, then
Tenant shall pay its proportional share of any deficiency to the Landlord within
fifteen (15) business days of billing by Landlord after the end of each year of
the Term. Based on reasonable estimates of increases in costs covered by this
Section , Landlord reserves the right to adjust Tenant's CAM Fund annually at
the time of such accounting effective on the first day of each calendar year
during the Term hereof upon thirty (30) days prior written notice to Tenant and
upon providing Tenant with documentation supporting such estimates. Any such
change shall be effective retroactively to the first day of the calendar year
during which the adjustment is made. None of such common area maintenance costs
shall exceed amounts which are charged for such expenses in the Westford,
Chelmsford and Billerica, Massachusetts areas for property of the same general
type and size as in the Office Park and shall therefore be at commercially
reasonable, market rates.
Notwithstanding anything contained herein, Landlord reserves the right
separately to invoice Tenant for Tenant's proportionate share of any actual
expense for items reasonably
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beyond Landlord's control contained in the Tenant's CAM Fund which exceeds the
amount for such items by greater than five percent (5%). Any such charge shall
be effective retroactively to the first day of the calendar year during which
the adjustment was made.
Notwithstanding anything contained herein, Tenant shall have the right
to audit the books and records of Landlord pertaining to the maintenance of the
Premises, the Common Areas, the Lot and the Office Park as herein provided at
any time within three hundred sixty (360) days of receipt by Tenant of the
annual accounting to be delivered to Tenant pursuant to this Section 5.1. Within
seven (7) days after Tenant sends written notice to Landlord advising Landlord
of Tenant's desire to conduct any such audit, Landlord shall provide Tenant and
its representa- tives with access, during normal business hours, to such
Landlord's books and records at a location where such books and records are
customarily kept by Landlord hereunder. The cost of any such audit shall be paid
by Tenant, provided that, in the event it is determined on the basis of such
audit that the calculation for Tenant's CAM Fund and the charges in connection
therewith were inaccurate, then Landlord shall make any such necessary
adjustments as mentioned above, and if the results of the audit reveal a greater
than ten percent (10%) discrepancy from said annual accounting furnished by
Landlord, then Landlord shall pay, or reimburse Tenant, for the cost of such
audit.
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5.2. TAX EXPENSE. Tenant shall pay directly to the relevant taxing
authority (or to Landlord if required by Landlord's mortgagee) real estate taxes
assessed during the Term hereof (on a pro rata basis at the beginning or end of
the Term) attributable to the Tenant's Lot and the Building and any assessment,
levy, penalty, imposition or tax (including any tax which may replace or be
assessed in lieu of any of the foregoing), and any interest due thereon, imposed
by any authority and agency having the direct power to tax against the Tenant's
Lot and the Building (the "Tax Expense"). The term "real estate taxes" means the
real estate taxes, betterment assessments, water and sewer use rents, rates or
charges, and such other governmental charges and impositions which are or may be
charged, levied, assessed, imposed or become due and payable with respect to the
Lot, Building, and other improvements comprising the Premises. Landlord agrees
that Tax Expense shall include annually only Tenant's annual share of the cost
of any betterment, based on the useful life of such betterment. All such
payments shall be made prior to the date when interest or penalty would accrue
for non-payment or five (5) business days after Landlord provides Tenant with
the real estate tax bill, whichever is later. Tenant shall furnish to Landlord
copies of such bills and receipts evidencing payment for Landlord's records.
Notwithstanding the foregoing, Tenant shall have no responsibility for late
payment penalty or interest if Tenant's payment was timely made as above
provided.
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Tenant shall also pay all personal property taxes for Tenant's personal
property on the Premises or used in connection therewith. To the extent validly
imposed upon owners of real estate generally and only to the extent permitted by
law and to assure that the rentals hereunder are net to Landlord, Tenant shall
pay, when due, taxes levied or assessed against Landlord by reason of this Lease
on the rental or any other payment required to be made hereunder whether said
taxes are assessed solely on the rental payment hereunder or jointly with other
rentals collected pursuant to any law or ordinance now existing or hereafter
enacted (other than taxes levied on the net income of Landlord derived herefrom
as part of a state or federal income tax law applicable to Landlord's income,
and any income, franchise, gross receipts, corporation, capital levy, excess
profits, revenue, rent, inheritance, devolution, gift, estate, payroll or stamp
tax by whatsoever authority imposed or howsoever designated or any tax upon the
sale, transfer and/or assignment of Landlord's title or estate which at any time
may be assessed against or become a lien upon all or any part of the Premises or
this leasehold), subject to receipt of bills or other documentation evidencing
imposition and assessment of such taxes.
5.3. TAX ABATEMENT. Tenant shall have the right to contest in good
faith by appropriate proceedings diligently pursued the imposition or amount of
any real estate taxes assessed against
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the Lot or the Building or such personal property taxes payable by it hereunder,
including the right on behalf of, and in the name of the Landlord, to seek
abatements thereto. The Landlord shall reasonably cooperate with Tenant, at
Tenant's sole expense, in any such contest or abatement proceedings. In the
event that Tenant determines not to contest such taxes and Landlord desires to
file such contest, Landlord shall give written notice of that fact to Tenant and
shall have the sole right as to such tax bill to contest in good faith by
appropriate proceedings diligently pursued the imposition or amount of any real
estate taxes assessed against the Lot or the Building or such other taxes
payable by Tenant hereunder, including the right to seek abatements thereto. In
such event, the Tenant shall reasonably cooperate with Landlord, at Landlord's
sole expense, in any such contest or abatement proceedings. Any tax abatement or
rebate received shall be allocated to the parties in the same proportion as
payment. If Landlord shall receive on behalf of the Lot or the Building a rebate
or abatement on any tax paid by Tenant, then after deducting therefrom any costs
reasonably incurred by Landlord in obtaining such rebate or abatement, all of
such net rebate or abatement relating to the Lot or the Building or to personal
property taxes assessed against the Tenant's personal property shall be returned
to Tenant to the extent that such rebate or abatement relates to payment made by
the Tenant and
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not reimbursed by Landlord. If Tenant shall receive on behalf of the Lot or the
Building a rebate or abatement on any tax paid by Tenant, then after deducting
therefrom any costs reasonably incurred by Tenant in obtaining such rebate or
abatement, all of such net rebate or abatement related to the Lot, the Building
or to personal property taxes assessed against the Tenant's property shall be
retained by Tenant, as its sole property, to the extent such rebate or abatement
relates to a payment made by Tenant and not reimbursed by Landlord. The
remaining portion of such net rebate or abatement shall promptly be returned to
Landlord.
5.4 UTILITIES. Tenant shall be solely responsible for paying all
utilities, including, but not limited to, sewer, electricity, water, telephone
and gas consumed in the Building or on the Lot as the same from time to time
become due, and such bills shall be placed in Tenant's name and billed directly
by the utility to Tenant. Landlord reserves the right to pay such utility bills
if unpaid by Tenant following at least ten (10) days prior written notice from
Landlord, and to recover payment from Tenant with any interest and/or penalties
chargeable thereon as additional rent.
ARTICLE VI
LANDLORD'S COVENANTS
6.1 LANDLORD'S COVENANTS DURING THE TERM. Landlord agrees to cure any
defects due to improper installation or working
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order of utilities, or to defects in workmanship, materials or equipment in the
Building and other improvements constructed or to be constructed in or on the
Premises by Landlord, provided Tenant shall have given written notice of such
defects to Landlord prior to the first anniversary of the date of Substantial
Completion of the Building as defined in Article IX hereof, and, as to work
other than the Building, within one (1) year from the completion of such work by
Landlord, e.g. Tenant's Work. Additionally, Landlord shall use its best efforts
to obtain assignable warranties of longer than one year duration from other
contractors and subcontractors with regard to the Building. Any and all costs of
obtaining extended warranties for Tenant's benefit shall be borne by Tenant,
other than those standard HVAC and roof warranties being assigned by Landlord to
Tenant in the form of Exhibit "P" attached hereto (appropriately modified to
describe the Premises), the cost for which Landlord shall be solely responsible.
In addition, Landlord shall use reasonable efforts to obtain enforcement of
non-assigned warranties for Tenant's benefit. Landlord shall also furnish to
Tenant copies of all plans, operating manuals and the like within Landlord's
possession and/or within Landlord's reasonable control pertaining to the
improvements constructed or to be constructed in or on the Premises by or on
behalf of Landlord. In addition, Landlord shall be responsible during the Term,
at Landlord's expense and not as a cost
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allocable to Tenant under Section 5.1, for the structural integrity of the
Building (including the structural integrity of the roof, the foundations, and
the exterior precast concrete panels of the Building), damage and destruction
due to casualty or eminent domain (except as set forth in Article XIII) or
resulting from Tenant's negligence or misuse only excepted. Landlord shall
perform necessary repairs to maintain the structural integrity of the Building,
except that such repairs shall not be required in the case of (a) normal
settling or sagging of the above items within standard engineering tolerance
(provided, however, that Landlord is responsible in all events if the settling
and sagging affects the surface or structural integrity of the Building or
renders the Building unsafe or unfit for normal use); (b) damage or
deterioration resulting from reasonable wear and tear; (c) subject to Landlord's
restoration obligations under Article XIII hereof, damage and destruction due to
casualty or eminent domain; (d) damage or deterioration resulting from
overloading by Tenant which breaches the floor loading provisions of this Lease;
or (e) damage or deterioration resulting from misuse or negligence of Tenant.
Landlord shall also be responsible for (i) all routine exterior maintenance and
repair of the Building (including the non-structural elements of the roof, the
foundations and the exterior precast concrete panels), (ii) for such repairs as
are required by Article XIII hereof, and (iii) for replacement of
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all capital items of the Building which need replacement during the Term so long
as such replacement was not caused by the negligence or excessive use (other
than matters which are the subject of Section 15.3 of this Lease) of such
capital items by Tenant. Landlord shall charge Tenant under the provisions of
Article V for all costs of such routine exterior maintenance, repairs and
replacements, except for the Landlord's structural obligations set forth in this
Section 6.1. All other repairs and maintenance shall, except as specifically
otherwise provided herein, be the responsibility of Tenant.
In the event that Tenant gives notice to Landlord of a condition which
Tenant believes requires Landlord's repairs or a condition which, if left
uncorrected, will necessitate Landlord's repair, then, in accordance with the
terms of this Section 6.1, Landlord shall respond promptly to investigate such
condition, and, if such repairs are Landlord's obligation hereunder, Landlord
shall commence promptly to repair same and to diligently complete said repair.
Tenant agrees during the Term to provide Landlord notice as soon as reasonably
possible of any condition known to Tenant which might require, or if left
uncorrected will necessitate, Landlord's repair pursuant to this Section 6.1.
Tenant shall have the right to require, at reasonable times and with reasonable
notice, a representative of Landlord to inspect the Building for repairs which
may be the responsibility of Landlord.
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6.2 INTERRUPTIONS. Landlord shall not be liable to Tenant for any
compensation or reduction of rent by reason of inconvenience or annoyance or for
loss of business arising from power losses or shortages to the Building or from
the necessity of Landlord's entering the Premises, subject to Section 12.3, for
any of the purposes in this Lease authorized, or for repairing the Premises or
any portion of the Building or improvements or the Lot, except if such
interruption is due solely to Landlord's willful misconduct or gross negligence.
In case Landlord is prevented or delayed from making any repairs, alterations or
improvements, or furnishing any service or performing any other covenant or duty
to be performed on Landlord's part, by reason of any cause beyond Landlord's
reasonable control, Landlord shall not be liable to Tenant therefor, nor, except
as expressly otherwise provided in Articles IX and XIII hereof, shall Tenant be
entitled to any abatement or reduction of rent by reason thereof, nor shall the
same give rise to a claim in Tenant's favor that such failure constitutes actual
or constructive, total or partial, eviction from the Premises. Landlord agrees
to provide Tenant with reasonable advance notice prior to entering the Premises
except in the case of emergency.
Landlord reserves the right to stop any service or utility system when
necessary by reason of accident or emergency or until necessary repairs have
been completed. Except in case of
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emergency repairs, Landlord will give Tenant reasonable advance notice of any
contemplated stoppage and will use reasonable efforts to avoid unnecessary
inconvenience to Tenant by reason thereof.
ARTICLE VII
LANDLORD'S WARRANTIES AND REPRESENTATIONS
Landlord warrants and represents and covenants, and agrees as follows:
(a) Title. The title to the Premises is vested in Landlord, subject to no
defects or encumbrances except as set forth in Exhibit "O" attached hereto and
incorporated herein by this reference, Landlord and Tenant agreeing that items 3
and 11 in said Exhibit "O" shall be discharged and released by the construction
financing for construction of the Building.
(b) Authority. Landlord has the power and authority to enter into this Lease and
perform the obligations of Landlord hereunder. This Lease and all other
documents executed and delivered by Landlord constitute legal, valid, binding
and enforceable obligations of Landlord, and there are no claims or defenses,
personal or otherwise, or offsets whatsoever to the enforceability or validity
of this Lease.
(c) Hazardous Substances. The Premises (including, for the purposes of this
paragraph only, the Lot) is and to the best of Landlord's knowledge, shall, on
the Term Commencement Date, be
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free of the presence of Hazardous Substances in excess of levels permitted under
applicable law; to the best of Landlord's knowledge, there have been no releases
of Hazardous Substances on the Premises; to the best of Landlord's knowledge,
the Premises has not at any time been used for the generation, transportation,
management, handling, treatment, storage, manufacture, emission, disposal or
deposit of any Hazardous Substances or fill or other materials containing
Hazardous Substances in excess of levels permitted under applicable law; and, to
the best of Landlord's knowledge, the Premises is in compliance with all related
environmental laws. "Hazardous Substances" mean any industrial waste, toxic
waste, oil, chemical contaminant or other substance which, as of the date of
this Lease, is designated as hazardous or toxic under any federal, state or
local statute, law, ordinance, by-law, rule, regulation, order or decree now or
at any time hereafter in effect regulating, relating to, or imposing liability
or standards of conduct concerning any hazardous, toxic, dangerous, restricted
or otherwise regulated waste, substance or material, as now or at any time
hereinafter in effect, including but not limited to, any "oil" or "hazardous
material" as defined by the Massachusetts Oil and Hazardous Material Release
Prevention and Response Act of 1983.
Landlord shall, subject to the provisions of Section 12.9 hereof and in
the manner provided in Section 16.2 of this Lease,
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fully indemnify and hold Tenant harmless from any liability, damage, loss, cost
or expense (including, without limitation, reasonable attorney's fees and other
reasonable costs of legal representation) that arise from (i) personal injury or
property damage or (ii) the reasonable cost of remediation, which Tenant shall
actually suffer from Hazardous Substances existing on the Premises (a) prior to
the date hereof, or (b) after the date hereof attributable solely to Landlord's
acts or omissions. (d) No Violation and Actions. The execution, delivery and
performance by Landlord of its obligations under this Lease will not conflict
with or result in a breach of any law, governmental rule, regulation, judgment,
decree or order by which the Landlord, to the best of its knowledge, is bound,
or by any of the provisions of any contract to which Landlord is a party or by
which Landlord is bound, or by Landlord's partnership agreement or declaration
of trust. There is no action, suit, proceeding or investigation pending, or to
Landlord's knowledge threatened, before any agency, court or other governmental
authority which relates to the Premises, the use thereof, or the Office Park.
(e) Condemnation. There is no condemnation proceeding affecting the Premises or
any portion thereof currently pending nor, to Landlord's knowledge, is any such
proceeding threatened.
(f) Compliance. The Premises complies with or, prior to the Term Commencement
Date, will comply with all applicable governmental requirements in respect to
the use, occupation and
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construction thereof, including but not limited to environmental, zoning,
platting and other land use requirements, and Landlord has received no notice of
and has no knowledge of any violations or investigations relating thereto. (g)
Default, Breach, Access and Utilities. To the best of Landlord's knowledge,
there is no default or breach by Landlord under any covenants, conditions,
restrictions, rights-of-way, or easements which may affect the Premises or any
portion thereof. Gas, electric power, septic and storm sewer and water
facilities, and all other utilities necessary for Tenant's intended use and
operation of the Premises will be available to and servicing the Premises in
quantities satisfactory to service the Premises for Tenant's intended use. To
the best of Landlord's knowledge, no condition exists which would result in the
termination or impairment of access to the Premises or discontinuation of
necessary sewer, water, electric, gas, telephone, or other utilities.
(h) Assessments. No special or general assessments have been levied, or to
Landlord's knowledge are threatened against all or any part of the Premises.
(i) Legally Subdivided Lot. The Lot is a legally subdivided lot.
(j) Buried Tanks. To the best of Landlord's knowledge, there are no
underground storage tanks on the Lot, nor have underground storage tanks been
removed from the Lot.
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(k) Misrepresentation and Adverse Facts. Landlord has made no untrue statements
or representations in connection with this Lease, and all items transferred, or
to be transferred, to Tenant are true and correct copies of what they purport to
be. Said items have not been amended or modified, other than as also transferred
to Tenant, and no items that should have been set forth as exhibits hereto or
transferred to Tenant have not been so set forth or transferred. Landlord has
not failed to state or disclose any material fact in connection with the
transaction contemplated by this Lease. Landlord knows of no facts, nor has
Landlord failed to disclose any fact, which would prevent Tenant from using and
operating the Premises in the manner in which it is intended to be operated by
Tenant for the Permitted Uses.
(l) Absence of Moratorium. To the best of Landlord's knowledge, no moratorium,
statute, order, regulation, ordinance, legislation, judgment, ruling or decree
of any court or governmental agency has been enacted, adopted, issued, entered
or is pending or in effect, that could materially adversely affect the Premises,
Tenant's ability to operate the Premises for the Permitted Uses, or Landlord's
ability to develop and operate the remainder of the Office Park.
(m) Bankruptcy Matters. Neither Landlord nor The Gutierrez Company has made a
general assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of an involuntary petition by the creditors,
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suffered the appointment of a receiver to take possession of substantially all
of its assets, suffered the attachment or other judicial seizure of
substantially all of its assets, admitted its inability to pay its debts as they
come due, or made an offer of settlement, extension or composition to its
creditors generally.
(n) Landlord shall continue to operate and maintain the sewer treatment plant
for the benefit of the Office Park, including without limitation, maintaining
the validity of all required permits and approvals and performing the tenant's
obligations under any ground lease affecting the Office Park sewer treatment
plant.
ARTICLE VIII
USE OF PREMISES
8.1. Use. Tenant may use the Premises for the Permitted Uses
specified in Section 1.1 of this Lease.
8.2. Permits. Since Landlord's general contractor is constructing the
Landlord's Work and the Tenant's Work, Landlord shall, prior to the time Tenant
occupies the Premises for the aforesaid purposes, procure all authorizations and
permits which may be required for the general office use made of the Premises
including, but not limited to, certificates of occupancy. Tenant agrees that it
will aid the Landlord in obtaining such authorizations and permits if its
assistance is required by the issuing authority or authorities.
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ARTICLE IX
PREPARATION OF PREMISES
9.1. INITIAL CONSTRUCTION. Landlord shall fully construct the Premises
in accordance with the Preliminary Base Building Plans (the "PBBP") and the
Outline Specifications attached hereto as Exhibit "B-1" and Exhibit "B-2",
respectively (all such work being hereinafter collectively referred to as the
"Landlord's Work"). In the event of differences between the PBBP's or the
Landlord's Plans (as hereinafter defined) and the Outline Specifications, the
Outline Specifications shall govern and control until the Landlord's Plans (as
hereinafter defined) are prepared. The PBBP includes Engineered Site Plan dated
June 3, 1996 (the "Plan of Building Footprint"), Preliminary Plan and Details of
Entrance Location, Location of Truck Docks, Location of Elevators, Location of
Interior Stairs, Preliminary Plan and Location of Building Core (including
lavatories, mechanical and electrical rooms), Preliminary Exterior Elevations of
the Building, and Plan of Bay Spacing.
Complete sets of final base building plans and construction drawings
and specifications (collectively the "Landlord's Plans") shall be prepared by
the Landlord. A complete set of construction plans and specifications for
Tenant's Work (as hereinafter defined), shall be prepared by Tenant's Architect
(which such Architect has been approved by Landlord and hired by Tenant, at
Tenant's sole cost and expense), subject to final
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approval by Landlord and Tenant (collectively, the "Tenant's Plans"). The
Tenant's Plans shall be furnished to Landlord as herein provided.
Landlord provided to Tenant on June 25, 1996, the PBBP. Tenant hereby
acknowledges that it has commented upon and approved the PBBP on July 26, 1996.
Landlord agrees to use best efforts to deliver the Landlord's Plans to
Tenant on or before July 26, 1996. Landlord also agrees to deliver to Tenant
schematic and design development plans as they are being produced. Upon receipt,
Tenant shall have seven (7) days to comment upon the Landlord's Plans. Landlord
and Tenant shall use reasonable efforts to reach agreement on the Landlord's
Plans as soon thereafter as possible. In reaching such agreement, Landlord and
Tenant shall each approve portions of the Landlord's Plans that are in
acceptable form and shall note their respective objections to the portions that
are unacceptable to each of them so as to enable Landlord to continue
construction and order materials in a timely manner.
In the event that Landlord's Plans conform with the PBBP, but Tenant
does not approve the Landlord's Plans within seven (7) days of receipt thereof
from Landlord, the Outside Delivery Date (as hereinafter defined) shall be
extended for a number of days equal to the number of Tenant Plan Delay Days, as
said term is hereinafter defined. The number of Tenant Plan Delay Days
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are defined as and shall be calculated by determining the actual number of days
as certified by Landlord and its architect that the Term Commencement Date was
delayed by such Tenant's failure to approve the Landlord's Plans within the
required seven (7) days. Landlord agrees to provide Tenant with written notice
of such determination, such notice to include reasonable detail describing the
cause of the delay and the number of Tenant Plan Delay Days as certified by
Landlord and its architect. If Tenant and Tenant's Architect disagree with the
existence or calculation of Tenant Plan Delay Days as determined by Landlord and
its architect, then Tenant shall, within seven (7) days of receipt of Landlord's
notice, notify Landlord of its disagreement, whereupon within seven (7) days
such Landlord's architect and Tenant's Architect shall appoint a third
architect. The number of Tenant Plan Delay Days shall be the actual number of
days determined by averaging the two closest determinations by the three (3)
architects, with the determination of the architect which was not closest to
another architect's determination excluded from such calculation. Landlord and
Tenant shall each bear the cost of their own architect and shall share equally
the cost of the third architect. During such arbitration period, the parties
agree to cooperate with one another so as to proceed with construction in a
timely manner.
Landlord and Tenant hereby acknowledge and agree (i) that Tenant has
selected Add, Inc. to be Tenant's Architect for
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preparation of Tenant's Plans, and the costs of services of such Tenant's
Architect shall be borne by Tenant. Landlord and Tenant hereby further agree
that Tenant shall solely be responsible for coordinating with Tenant's Architect
for the timely preparation of Tenant's Plans in accordance with the terms and
provisions of this Section 9.1.
Tenant shall have until the later of (i) sixty (60) days after final
approval of the Landlord's Plans by Tenant or (ii) October 25, 1996 to deliver
to Landlord the Tenant's Plans. Landlord shall have the right to review Tenant's
Plans in order to determine the compatibility of such plans with Landlord's
Plans. Landlord may require (i) modifications in Tenant's Plans, or (ii) if the
construction of the interior of the Premises according to such plans and
specifications will result in a material interference or a material delay with
Landlord's construction of the Premises, an extension of time to substantially
complete the Premises (the length of any such extension to be determined by
Landlord in its reasonable judgment and certified by Landlord and its
architect). Revisions to Tenant's Plans by Tenant shall be made expeditiously
and shall be reviewed promptly by Landlord for approval.
Should Landlord give Tenant notice that construction in accordance with
such Tenant's Plans (including any modifications thereto) will result in a
material interference or a delay of
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Landlord's construction of the Premises, then Landlord and Tenant shall attempt
to mutually agree on an acceptable extension of time to substantially complete
the Premises. If Tenant and Tenant's Architect disagree with Landlord's and
Landlord's architect's calculation of such extension, then Tenant shall, within
five (5) days of receipt of Landlord's calculation, notify Landlord of its
disagreement, whereupon Landlord's architect and Tenant's Architect will then
(within five (5) days of such Tenant's notice of disagreement) appoint a third
architect. Such third architect shall establish within ten (10) days of its
appointment the duration of such extension. The duration of such extension of
time to substantially complete the Premises shall be the average of the two
closest determinations by the three (3) architects, with the determination of
the architect which was not closest to another architect's determination
excluded from such calculation. Landlord and Tenant shall each bear the cost of
their own architect and shall share equally the cost of the third architect.
During such arbitration period, the parties agree to cooperate with one another
so as to proceed with construction in a timely manner. Such extension time,
whether mutually agreed upon by Landlord and Tenant or determined by such
architects pursuant to the preceding provisions, shall result in "Tenant Plan
Delay Days" as hereinbefore determined. In addition, Landlord will not approve
Tenant's Plans which involve any
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construction, alterations or additions requiring unusual expense to readapt the
Premises to normal office or electronic laboratory use on the Term Expiration
Date, unless Tenant first gives assurances acceptable to Landlord that such
readaptation will be made prior to such termination without expense to Landlord.
Landlord shall have fifteen (15) days after receipt of and mutual
agreement on Tenant's Plans to price the cost of Tenant's Work (as hereinafter
defined) in accordance with the last paragraph of Section 9.1.1.
Landlord and Tenant shall cooperate during the above time periods so
that each party makes the other aware of their progress with respect to the
foregoing plans, selections and pricing, as well as timing, availability or cost
constraints of Tenant's selections or specifications and proposed alternates.
Landlord shall cause the Premises to be completed in accordance with
Landlord's Plans and Tenant's Plans, all of such work to be performed by
Landlord's general contractor, Gutierrez Construction Co., Inc. The Tenant may
request changes to Landlord's Work by altering, adding to, or deducting from
Landlord's Work as set forth in the agreed form of Landlord's Plans. A change in
Landlord's Work initiated by the Tenant (or in Tenant's Work as such term is
defined in Section 9.1.1 hereof) which affects Landlord's Work may also
necessitate an adjustment in the Outside Delivery Date (as defined in Section
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9.2 hereof) and may result in Tenant Alteration Delay Days (as hereinafter
defined). Landlord agrees to provide Tenant with written notice if any such
adjustment in the Outside Delivery Date will be necessary based upon the change
in Landlord's Work or Tenant's Work initiated by Tenant. In addition, Landlord
agrees to provide Tenant, upon Tenant's request, with sufficient itemization and
back-up documentation to facilitate analysis and to confirm the cost of any such
changes in the Landlord's Work or the Tenant's Work initiated by Tenant. Tenant
shall pay any additional amount equal to the actual cost (as defined in Section
9.1.1 hereof) of any increase in the cost of Landlord's Work due to such
changes, including the costs of any changes from the Outline Specifications in
Exhibit "B-2", less any appropriate credits for any Landlord's Work deleted
(hereinafter referred to as the "Net Additional Cost of Landlord's Work"). The
Net Additional Cost of Landlord's Work shall be due and payable to Landlord in
the manner specified in Section 9.1.1 of this Lease, but in any event prior to
the Term Commencement Date.
Landlord will also disapprove any alterations or additions requested by
Tenant which will unreasonably delay completion of the Premises or the Building
due to materials or equipment having long delivery times or which would cause
construction sequencing delays unless Tenant agrees in writing that it will pay
Fixed Rent and additional rent hereunder for a number of
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days equal to the actual number of days (the "Tenant Alteration Delay Days") as
certified by Landlord and its architect, by which the Term Commencement Date
would be delayed by such alterations or additions, giving due consideration to
Landlord's obligation to use reasonable efforts to accelerate construction to
make up for lost time due to delays. Landlord agrees to promptly provide Tenant
with written notice of such determination, such notice to include reasonable
detail describing the cause of the delay and the number of Tenant Alteration
Delay Days as certified by Landlord and its architect.
If Tenant and Tenant's Architect disagree with the calculation of
Tenant Alteration Delay Days as hereinabove determined by Landlord and its
architect, then Tenant shall, within seven (7) days of receipt of such
Landlord's notice, notify Landlord of its disagreement, whereupon within seven
(7) days of such Tenant's notice of disagreement, Landlord's architect and
Tenant's Architect shall appoint a third architect. Such third architect shall
make a determination within ten (10) days of its appointment. The number of
Tenant Alteration Delay Days shall be the actual number of days determined by
averaging the two closest determinations by the three (3) architects, with the
determination of the architect which was not closest to another architect's
determination excluded from such calculation. Landlord and Tenant shall each
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bear the cost of their own architect and shall share equally the cost of the
third architect. During such arbitration period, the parties agree to cooperate
with one another so as to proceed with construction in a timely manner.
All tenant improvements, changes and additions (except for Tenant's
business fixtures, equipment and personal property, including without
limitation, demountable partitions, manufacturing equipment and telephone or
computer systems) shall be part of the Premises (and shall remain therein at the
end of the Term), and, except such other items as the Landlord, Landlord's
mortgagee and Tenant agree in writing prior to the installation thereof either
(a) shall be removed by Tenant on termination of this Lease, or (b) shall be
removed or left at Tenant's election.
9.1.1. TENANT'S WORK. So long as Landlord has approved Tenant's Plans
in writing, as hereinabove set forth, Landlord and Tenant agree that Landlord's
general contractor will construct the tenant improvements set forth on the
Tenant's Plans (hereinafter "Tenant's Work") with respect to the Premises at
cost (as hereinafter defined) plus a fee for overhead and supervision of seven
percent (7%) of such cost, plus a general contractor's fee of six percent (6%)
of such aggregate cost (i.e. cost plus overhead and supervision).
For purposes hereof, the cost of the Net Additional Cost of Landlord's
Work and the Tenant's Work performed by Landlord's
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contractor shall be the actual net additional cost of any of such work performed
by Landlord, or Landlord's contractor, as specified in the Landlord's Plans, or
the Tenant's Plans, as applicable, as modified by approved change orders
approved in accordance with the provisions of the form of change order attached
as Exhibit "L" hereto. Landlord and Tenant further agree that the certification
of cost by Gutierrez Construction Co., Inc. shall be based on the definition of
cost, as more particularly set forth in Exhibit "M" hereto. Any changes to the
Tenant's Plans after the approval of the Tenant's Plans (and any changes to
Landlord's Plans after the approval thereof as set forth in Section 9.1 above)
shall be in accordance with the form of Work Change Order attached hereto as
Exhibit "L". Landlord shall provide Tenant with construction cost estimates
based on Tenant's Plans, including a breakdown thereof, the name of the
subcontractor, if available, and the work and/or materials to be provided.
Unless otherwise mutually agreed upon by Landlord and Tenant, in the pricing of
the cost of Tenant's Work (specifically excluding Landlord's Work hereunder),
Landlord agrees to obtain three (3) bids from qualified subcontractors selected
from a master list of subcontractors mutually prepared by Landlord and Tenant
prior to the soliciting of bids for Tenant's Work, but only to the extent that
the same exceeds ten thousand dollars ($10,000.00) giving due consideration to
factors such as price, delivery commitments,
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and to Landlord's construction experience, Landlord shall have the right to
select which such subcontractor shall be awarded the Tenant's Work. Upon
Tenant's request, Landlord hereby further agrees to furnish Tenant with copies
of such subcontractor bids used by Landlord in connection with the pricing of
Tenant's Work. In addition, in the event that Landlord and Tenant are unable to
agree on the cost of any portion of said work, Landlord's Representative and
Tenant's Representatives for construction matters shall, within ten (10) days of
their inability to agree on a price, select a third party familiar with building
construction who shall establish within ten (10) days of his selection the cost
of the portions of the work in dispute determined as set forth above. Said third
party, including the construction lender's independent construction consultant,
shall be mutually chosen by Landlord and Tenant. The cost determined by said
third party shall be final and binding on Landlord and Tenant, and Landlord and
Tenant shall share equally the cost of such third party.
In order to provide for payment by Tenant of the cost of Tenant's Work
and any change orders provided for hereunder, including but not limited to the
Net Additional Cost of Landlord's Work, Tenant agrees to deposit monthly into an
interest-bearing account to be established and maintained by Landlord's
mortgagee, within five (5) business days of receipt of each of Landlord's
monthly requisitions to its mortgagee
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therefor (a copy of which shall also be furnished to Tenant), the total amount
of such requisition for Tenant's Work and/or change orders performed in the
Premises for the preceding month. Landlord shall separately invoice Tenant for
the allocable portion of the interest costs (i.e., the interest rate charged to
Landlord by Landlord's mortgagee on Landlord's construction loan) incurred by
Landlord in connection with its financing of the cost of such Tenant's Work and
change orders on a monthly basis during the construction of the Tenant's Work,
and Tenant agrees to pay each such invoice to Landlord within five (5) business
days of receipt thereof. Tenant also agrees to pay the one-half percent (1/2%)
commitment fee incurred by Landlord in connection with its financing of the cost
of such Tenant's Work and any related change orders within five (5) business
days of receipt of an invoice from Landlord. In addition, Tenant shall, within
five (5) business days of receipt of an invoice therefor, deposit into the
escrow account that portion of the building permit fee charged by the Town of
Westford allocable to the Tenant's Work. Tenant shall be responsible for payment
of escrow fees, if any, incurred by Tenant in connection with such escrow
account. Any and all interest earned on the escrowed funds shall be payable to
Tenant at such time as the escrow is released by Landlord's mortgagee. It is
acknowledged and agreed by Landlord and Tenant that Landlord's mortgagee shall
have no right to set off such escrow account against any of Landlord's
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obligations with its mortgagee. The escrow account shall be in the name of
Tenant and shall accumulate deposits as hereinabove set forth until such time as
Landlord's mortgagee's inspecting engineer approves Substantial Completion of
Landlord's Work and Tenant's Work, as such term is more specifically defined in
Section 9.2(b) of this Article, and Landlord's mortgagee has funded the final
requisition (including retainage) relating thereto (except for holdbacks for
minor punch list items). At such time as Landlord has substantially completed
Landlord's Work and Tenant's Work, as defined in said Section 9.2(b) of this
Article, Landlord's mortgagee shall be entitled to apply the principal of such
escrow account to reduce Landlord's construction loan. In the event that this
Lease is terminated by Tenant pursuant to the provisions of Section 9.2,
Landlord's mortgagee shall release all amounts in the escrow account (including
interest) to Tenant.
The total estimated cost to complete the Tenant's Work under this Lease
and the tenant's work to be constructed by Landlord in accordance with that
certain lease (the "Building 8 Lease") of even date between Landlord and Tenant
with respect to the building commonly referred to as Building 8 in the Office
Park is four million four hundred thousand dollars ($4,400,000.00) (hereinafter,
the "Total Estimated Cost"). Landlord and Tenant hereby acknowledge and agree
that, at Tenant's election, Landlord first shall finance the cost of such
Tenant's Work
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hereunder and the tenant's work under the Building 8 Lease, including any and
all change orders in connection therewith, up to an amount not to exceed the
Total Estimated Cost. The estimated cost to complete the Tenant's Work hereunder
is two million six hundred thousand dollars ($2,600,000.00) (hereinafter, the
"Original Cost"). To the extent that the actual cost of the Tenant's Work and
change orders, as determined by this Article, is greater than the Original Cost,
Landlord shall provide Tenant with written notice of such fact together with
reasonable supporting information. In such event, and only after the Total
Estimated Cost has been expended by Tenant in the manner hereinabove set forth
and in the Building 8 Lease, Landlord shall provide Tenant with monthly
construction requisitions for the construction of the portion of the Tenant's
Work and change orders in excess of the Original Cost, and Tenant agrees to pay
to Landlord monthly the total amount of any such monthly requisitions based on a
percentage of completion basis.
Landlord and Tenant hereby further acknowledge and agree to enter into
a formal escrow agreement with Landlord's mortgagee to implement the foregoing
arrangements prior to the commencement of the Tenant's Work.
9.1.2. TENANT'S CONSTRUCTION WORK. Tenant agrees that any construction
included in Tenant's Plans which Tenant specifies to be done by itself or its
contractors (hereinafter referred to
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as "Tenant's Construction Work"), which shall include Tenant's installation of
its voice and data lines, conduits and equipment, and Tenant's installation of
furnishings and furniture and later changes or additions, shall be coordinated
with any work being performed by Landlord in such a manner as to maintain
harmonious labor relations and not damage the Premises or Lot or interfere with
the operation of the Building or with any of Landlord's construction work
hereunder, including but not limited to the construction of the Landlord's Work
and Tenant's Work. Tenant (including its contractors, agents or employees) shall
have access to the Premises and may perform Tenant's Construction Work on the
Premises prior to the Scheduled Term Commencement Date and prior to the
commencement of the Term so as to prepare the Premises for occupancy by Tenant,
provided that (i) Tenant's contractors, agents or employees work in a harmonious
labor relationship with Landlord's general contractor, (ii) reasonable prior
written notice is given to Landlord's general contractor specifying the work to
be done, (iii) no work shall be done or fixtures or equipment installed by
Tenant in such manner as unreasonably to interfere with any work being done by
or for Landlord on the Premises, and (iv) Tenant has obtained, at its sole cost
and expense, any and all permits and approvals necessary in connection with such
work, if any. During the period of preoccupancy of the Premises by Tenant in
connection with Tenant's Construction Work prior to
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the commencement of the Term, no Fixed Rent or additional rent shall accrue or
be payable, but otherwise such preoccupancy shall be subject to all the terms,
covenants and conditions contained in this Lease.
9.2. PREPARATION OF PREMISES FOR OCCUPANCY. Landlord is obligated to
perform the construction work set forth in the Landlord's Plans and the Tenant's
Plans, and, therefore, Landlord agrees to have the Premises ready for occupancy
on the Scheduled Term Commencement Date.
Landlord and Tenant agree that time is of the essence, and Landlord
agrees to use reasonable efforts to accelerate construction to make up for time
lost due to any delays.
The Term of this Lease shall commence on the date the Premises are
deemed ready for occupancy as set forth below (the "Term Commencement Date").
The Premises shall be deemed ready for occupancy on the earlier of:
a. the date on which Tenant occupies all of the Premises; or
b. the date on which the construction, as specified in this Section
9.2, to be completed or caused to be completed by Landlord, is substantially
completed, as defined below, as certified by Landlord's architect, and Landlord
has delivered to Tenant copies of all permits and approvals required to be
obtained from any governmental agency prior to occupancy of the
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Premises by Tenant, including, without limitation, a certificate of occupancy
from the Town of Westford or a temporary certificate of occupancy from the Town
of Westford which allows Tenant to use and occupy the Building, including in all
cases use of the two (2) elevators, and which temporary certificate of occupancy
is not conditional on the performance of any work other than the Punch List Work
as defined below, except that such permit(s) and approval(s) shall not be
required as a condition of Substantial Completion if Landlord is unable to
secure the same due solely to Tenant's failure to complete Tenant's Construction
Work as specified in Section 9.1.2 above (which such date, subject to additional
terms and provisions of this Section 9.2, shall hereinafter be referred to as
the date of "Substantial Completion").
If Tenant shall not have commenced to occupy all of the Premises after
they are deemed ready for occupancy as provided in this Section 9.2, an AIA
Certificate of Substantial Completion by the Landlord's architect (which such
Certificate shall be in the form attached hereto as Exhibit "D-1") shall
evidence the Landlord's determination that it has performed all such
obligations, except for completing the landscaping work and completing the
finish paving course, and minor items stated in such Certificate to be
incomplete or not in conformity with such requirements, all of which work will
not interfere with Tenant's Work or will not unreasonably interfere with
Tenant's use or
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occupancy of the Premises and all of which work (collectively such landscaping
work, finish paving course work and minor items are referred to herein as the
"Punch List Work") shall be promptly completed within thirty (30) days after the
date of Substantial Completion, as herein provided. Landlord agrees to furnish
to Tenant said Certificate of Substantial Completion, regardless of whether
Tenant is occupying the Premises (or any portion thereof) or not, upon
performance of all of the obligations set forth above. Tenant shall have the
right, within fifteen (15) days after Tenant's receipt of said Certificate of
Substantial Completion, to notify Landlord of Tenant's and Tenant's Architect's
disagreement with said Certificate, and if the parties are unable to agree on
whether or not said Certificate of Substantial Completion should have issued
within ten (10) days of Tenant's notification to Landlord of Tenant's
disagreement with said Certificate,then the Landlord's architect and Tenant's
Architect shall promptly mutually employ a third architect to be employed at the
expense of both parties who shall then promptly certify as to the date of
Substantial Completion and such certification shall be binding on the Landlord
and Tenant. If the determination by the third architect differs from the
determination of Substantial Completion made by Landlord's architect, then the
parties shall adjust the Rent payments accordingly. In any event, the Tenant
agrees to pay Rent for the Term commencing as set forth above
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using the date set forth in the Certificate of Substantial Completion by
Landlord's architect as the operative date of Substantial Completion, and Rent
adjustments, if any, shall be made subsequently in accordance with the decision
of the third architect.
If weather interferes with Landlord's ability to finish the final
course of paving and outside work or such other Punch List Work, which such work
does not substantially interfere with Tenant's occupancy, within thirty (30)
days after the date of Substantial Completion as herein provided, said work can
be completed by Landlord reasonably thereafter, so long as such delay does not
and will not interfere with or prevent Landlord from obtaining a certificate of
occupancy upon completion of all other work herein described.
After Landlord has completed all Landlord's Work and Tenant's Work,
including all Punch List Work, Landlord's architect shall forward to Tenant its
Certificate of Final Completion, such Certificate to be in the form attached
hereto as Exhibit "D-2". In addition, upon completion of all such work,
including all Tenant's Construction Work by Tenant, Landlord shall forward to
Tenant a final certificate of occupancy from the Town of Westford.
However, if Landlord is unable to complete its construction by the
Scheduled Term Commencement Date due to (i) a delay in Tenant's delivery of the
Tenant's Plans pursuant to Section 9.1
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hereof, or (ii) a delay caused by Tenant performing the Tenant's Construction
Work pursuant to Section 9.1.2 hereof, or (iii) a delay caused by a change in
the Landlord's Plans or Tenant's Plans initiated by Tenant as reflected in a
Work Change Order pursuant to Sections 9.1 and 9.1.1 hereof, or (iv) a delay or
stoppage requested in writing by Tenant, or (v) a delay caused by the existence
of Tenant Plan Delay Days and Tenant Alteration Delay Days pursuant to Section
9.1 hereof (collectively hereinafter referred to as "Tenant's Delay"), then the
Term Commencement Date shall be deemed to have occurred on the date, as
certified by Landlord and its architect, that the Landlord would have
substantially completed the work had there not occurred such Tenant's Delay,
calculated by determining the actual number of days that the Scheduled Term
Commencement Date was delayed by such Tenant's Delay giving consideration to
Landlord's obligation under the second paragraph of this Section 9.2 to
accelerate to make up for time lost due to any delays. Landlord agrees to
promptly provide Tenant with written notice of such Tenant's Delay, such notice
to include reasonable detail (including back up documentation if available to
Landlord) describing the cause of the delay as certified by Landlord's architect
and the number of Tenant's Delay days as certified by Landlord and its
architect.
If notice of a Tenant's Delay is not given to Tenant within ten (10)
days of its occurrence, then there shall be no Tenant's
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Delay for such item(s). Tenant shall have the right within seven (7) days after
receipt of said certification by Landlord and its architect to notify Landlord
of its disagreement with the calculation of Tenant's Delay days. Within seven
(7) days of Tenant's notification to Landlord of Tenant and Tenant's Architect's
disagreement with said calculation, Landlord's architect and Tenant's Architect
shall promptly mutually employ (at the expense of both Landlord and Tenant) a
third architect, who shall promptly certify as to the total number of Tenant's
Delay days. The number of Tenant's Delay days shall be the actual number of days
determined by averaging the two closest determinations by the three (3)
architects, with the determination of the architect which was not closest to
another architect's determination excluded from such calculation.
Notwithstanding the foregoing provisions, if the Premises are not
deemed ready for occupancy on or before the Outside Delivery Date (as defined
below) for whatever reason, Tenant may elect (i) to cancel this Lease at any
time thereafter while the Premises are not deemed ready for occupancy by giving
notice to Landlord of such cancellation which shall be effective ten (10) days
after such notice, unless within such ten (10) day period Landlord delivers the
Premises ready for occupancy as defined herein, in which event such notice of
cancellation shall be rendered null and void and of no further force or effect,
or (ii) to enforce Landlord's covenants to construct the Premises in accordance
with the terms of this Lease.
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In the event Tenant elects to enforce Landlord's agreement to construct
the Premises in accordance with this Lease, Tenant shall also have the right to
terminate this Lease if Landlord fails to complete the Premises within the
period of time set by any court of competent jurisdiction for such work to be
completed, or within such additional period of time from the date of Landlord's
default as may be mutually agreed to by Landlord and Tenant. In the event that
Tenant elects not to cancel this Lease pursuant to (i) above, and Substantial
Completion of the Premises is delayed beyond the Outside Delivery Date (as
hereinafter set forth), as such date may be extended hereunder, Landlord agrees
that no Fixed Rent or additional rent shall be due from Tenant to Landlord until
the thirtieth (30) day following Substantial Completion, as defined in Section
9.2(b) of this Article. The foregoing rights shall be the Tenant's sole remedy
at law or in equity for Landlord's failure to have the Premises ready for
occupancy as required hereunder.
For purposes hereof, the Outside Delivery Date shall be deemed to refer
to that certain date which is sixty (60) days following the Scheduled Term
Commencement Date, as such Outside Delivery Date may be extended for a period
equal to that of (i) any delays due to Force Majeure as defined in Section 9.5
hereof, (ii) the number of days caused by a Tenant's Delay as hereinbefore
determined; provided, however, that there shall be
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no extensions of said date (other than for the matters set forth in clause (ii)
above) for any specific matter set forth in clause (i) above for more than
ninety (90) days, or for any reason or combination of the foregoing for more
than one hundred twenty (120) days in the aggregate.
9.2.1 PARTIAL OCCUPANCY AND RENT COMMENCEMENT. If the entire Premises
are not ready for occupancy on the Scheduled Term Commencement Date, the Tenant
may occupy any portion or portions of the Premises which are ready for occupancy
when, in Landlord's opinion, it can be done without material interference with
remaining work. In such event, Tenant agrees not to materially interfere with
Landlord's construction of the Premises. In the event Tenant takes occupancy of
a portion of the Premises, that portion shall be deemed ready for occupancy as
to said portion on the date of occupancy of such portion and Tenant's obligation
to pay Fixed Rent and additional rent (including, but not limited to, real
estate taxes, electric expenses and payments to Tenant CAM Fund) shall commence
on said date pro rata based on the square footage occupied compared to the total
square footage in the Building.
9.3. GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION. All construction
work required or permitted by this Lease, whether by Landlord or by Tenant (or
by their respective subcontractors), shall be done in a good and workmanlike
manner and in compliance with all applicable laws and all lawful
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ordinances, regulations and orders of any governmental authority and insurers of
the Building. Either party may inspect the work of the other at reasonable times
and may give notice of observed defects. Notice of such defects shall be in
writing and shall be rectified by Landlord or by Tenant, as the case may be,
within thirty (30) days of the original date of the notice. Failure to provide
notice hereunder shall not be the basis for any liability or for injury or
damage caused by such defect or waiver of right to cause any defect to be
corrected.
9.4. REPRESENTATIVES. Each party authorizes the other to rely in
connection with their respective rights and obligations under this Article IX
upon approval and other actions on the party's behalf by Landlord's
Representative in the case of Landlord or Tenant's Representatives for
construction matters in the case of Tenant or by any person designated in
substitution or addition by notice to the party relying.
Landlord hereby acknowledges and agrees that only the following
persons, Daniel F. Harrington or Walter A. Shephard, or any successors to either
of them holding the same title or any other person delegated the authority from
either of them in writing (hereinafter "Tenant's Construction Representatives")
have the authority to act on Tenant's behalf and represent Tenant's interests
with respect to all matters requiring Tenant's action in this Article. No
consent, authorization or other action by Tenant with respect to matters set
forth in this
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Article shall bind Tenant unless in writing and signed by one of the
aforementioned persons. Landlord hereby expressly recognizes and agrees that no
other person claiming to act on behalf of Tenant is authorized to do so. If
Landlord complies with any request or direction presented to it by anyone
claiming to act on behalf of Tenant who does not have the title and position
mentioned above, such compliance shall be at Landlord's sole risk and
responsibility and shall not in any way alter or diminish the obligations and
requirements created and imposed by this Article, and Tenant shall have the
right to enforce compliance with this Article without suffering any waiver or
abrogation of any of its rights hereunder.
Tenant hereby acknowledges and agrees that only the following persons,
Arturo J. Gutierrez, John A. Cataldo, Dennis G. Bailey or P. Agustin Rios or any
successors to either of them holding the same title or any other person
delegated the authority from either of them in writing (hereinafter "Landlord's
Construction Representatives") have the authority to act on Landlord's behalf
and represent Landlord's interests with respect to all matters requiring
Landlord's action in this Article. No consent, authorization or other action by
Landlord with respect to matters set forth in this Article shall bind Landlord
unless in writing and signed by one of the aforementioned persons. Tenant hereby
expressly recognizes and agrees that no other person claiming to act on behalf
of
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Landlord is authorized to do so. If Tenant complies with any request or
direction presented to it by anyone claiming to act on behalf of Landlord who
does not have the title and position mentioned above, such compliance shall be
at Tenant's sole risk and responsibility and shall not in any way alter or
diminish the obligations and requirements created and imposed by this Article,
and Landlord shall have the right to enforce compliance with this Article
without suffering any waiver or abrogation of any of its rights hereunder.
9.5 FORCE MAJEURE. As used in this Article and elsewhere in the Lease,
"Force Majeure" shall mean a time extension equal to that of any delays due to
(i) Acts of God, (ii) changes in government regulations, (iii) casualty, (iv)
strike or other such labor difficulties not reasonably anticipatable, (v)
unusually severe weather conditions, (vi) unusual scarcity of, or inability
despite the exercise of diligence, to obtain supplies, parts or employees to
furnish such services, or (vii) other acts reasonably beyond Landlord's control
and not reasonably anticipatable, but in no event shall the term include
economic or financial difficulties.
ARTICLE X
COMPLIANCE WITH LAW
10.1. LANDLORD COMPLIANCE. Landlord shall comply with and shall from
time to time conform the Premises to all applicable
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laws, including hazardous waste laws and all lawful ordinances, regulations and
orders of any governmental authority (collectively, the "Laws"), except to the
extent Tenant may be so required as hereinafter set forth.
10.2. TENANT COMPLIANCE. Tenant shall comply, at Tenant's sole expense,
with all Laws if such compliance is necessitated by reason of Tenant's actual
use of the Premises, which such use shall in any event be in conformity with the
Permitted Uses as specified in Section 1.1 of this Lease.
10.3. NOTICE. Landlord and Tenant shall each have the right upon giving
notice to the other to contest any obligation imposed upon either pursuant to
the provisions of this Article and provided the enforcement of such requirement
or law is stayed during such contest and such contest will not subject the other
party to criminal penalty or materially interfere with Tenant's use and
occupancy of the Premises or jeopardize the title to the Premises or otherwise
affect the Premises in any adverse way. Each party shall cooperate with the
other in such contest and shall execute any documents reasonably required in the
furtherance of such purpose.
ARTICLE XI
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
11.1. ALTERATIONS. Tenant may, from time to time, at its own cost and
expense and without the consent of Landlord, make
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non-structural alterations, additions or improvements to the Premises
(collectively herein called "Alterations") whose cost in any one instance is
seventy-five thousand dollars ($75,000) dollars or less, provided Tenant first
notifies Landlord in writing of any such Alterations. If Tenant desires to make
any non-structural Alterations costing in excess of seventy-five thousand
dollars ($75,000) in any one instance or any other alteration, Tenant must first
obtain the consent of Landlord thereto, which consent shall not be unreasonably
withheld or delayed. If Landlord reasonably concludes that the Alterations
involve any construction, alterations or additions requiring unusual expense to
readapt the Premises to normal office or electronic laboratory use on the Term
Expiration Date, Landlord shall notify Tenant in writing at the time of approval
that such readaptation will be required to be made by Tenant prior to such Term
Expiration Date without expense to Landlord.
If Tenant desires to make any structural Alterations to the Building
(including to the structural components of the roof, the exterior precast
concrete panels, and/or the foundations), Tenant must first obtain the consent
of Landlord thereto, which consent shall not be unreasonably withheld or
delayed. If Landlord consents to Alterations affecting such structural
components, or portions thereof, Landlord shall be relieved of further
maintenance and repair responsibility for only such structural components of the
Building that were altered by
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Tenant, and Tenant shall assume responsibility for only those structural
components of the Building that were altered by Tenant, except that,
notwithstanding the foregoing, Landlord agrees, upon request of Tenant, to have
such Alterations be performed by Landlord or a contractor hired by Landlord, at
Tenant's sole cost and expense, in which event Landlord shall not be relieved of
any responsibility it may have for such portion of the structure of the Building
(including the structural integrity of the roof, the exterior precast concrete
panels and the foundations) altered by Landlord at Tenant's request.
If Tenant desires to make any alterations to the precast panels, or to
the exterior of the Building, Tenant must first obtain the prior written consent
of Landlord thereto which may be withheld in Landlord's reasonable discretion.
In no event shall the foregoing be deemed to impose or to imply any affirmative
obligation upon Tenant, rather than Landlord, for making repairs to any
structural components of the Building (or to the structural integrity of the
roof, the precast concrete panels, the foundations, or to the exterior of the
Building).
Any and all such Alterations may be done by any contractor chosen by
Tenant provided any such contractor is reputable, bondable by reputable bonding
companies, carries the kind of insurance and in the amounts set forth herein,
and will work in harmony with Landlord's contractors and laborers in the
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Building. Notwithstanding the foregoing, no such bonding shall be required for
non-structural Alterations.
11.2. LANDLORD PERFORMANCE OF ALTERATIONS. If Landlord or the
Landlord's general contractor performs the work of making Alterations for
Tenant, bids shall be obtained from three (3) independent subcontractors for
each major applicable subcontract discipline (mechanical, electrical, etc.)
having a value in excess of ten thousand dollars ($10,000.00) and Landlord or
Landlord's general contractor shall perform such work at actual cost, plus a fee
for overhead and supervision of seven percent (7%) of such cost, plus a
Landlord's contractor's fee of six percent (6%) of such aggregate cost (i.e.,
cost plus overhead and supervision).
11.3. TENANT PERFORMANCE OF ALTERATIONS. Tenant in making any
Alterations shall cause all work to be done in a good and workmanlike manner
using materials substantially equal to or better than those used in the
construction of the Premises or original Tenant's Work and shall comply with or
cause compliance with all laws and with any direction given by any public
officer pursuant to law. Tenant shall obtain or cause to be obtained and
maintain in effect, as necessary, all building permits, licenses, temporary and
permanent certificates of occupancy and other governmental approvals which may
be required in connection with the making of the Alterations. Landlord shall
cooperate with Tenant in the obtaining thereof and shall execute any
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documents reasonably required in furtherance of such purpose, provided any such
cooperation shall be without expense and/or liability to Landlord.
11.4. REMOVAL OF ALTERATIONS. At any time during the Term of this
Lease, Tenant may, at its option, remove any Alterations made so long as such
removal does not render the Premises non-functional as an office facility. In
the event of a removal of any Alterations by Tenant, Tenant shall, at its sole
cost, repair any damage to the Premises caused by such removal.
11.5. GENERAL PROVISIONS. At least annually if such Alterations have
occurred during the past calendar year, Tenant shall furnish to Landlord
as-built sepias and, if applicable, operating manuals, or, at Landlord's option
and only if Tenant's computer system is compatible with that of Landlord's,
computer disk specifications compatible with Landlord's computer system of the
work done by Tenant during such past year and copies of all permits issued in
connection therewith.
Tenant shall have its contractor procure and maintain in effect during
the term of such Alterations the following insurance coverages with an insurance
company or companies authorized to do business in the Commonwealth of
Massachusetts:
(a) Worker's Compensation and Occupational Disease Insurance in
accordance with the laws of the Commonwealth of Massachusetts, along with a "All
States" and "Voluntary Compensation" coverage endorsement.
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(b) Employer's Liability insurance with a limit of not less than
$100,000.00 per person by accident/$100,000.00 per person by disease/$500,000.00
per policy by disease.
(c) Commercial General Liability including Personal Injury and Property
Damage in the amount of a combined single limit of not less than $2,000,000.00
each occurrence. Coverage must include the following:
(i) premises - operations;
(ii) elevators and hoists;
(iii) independent contractor; and
(iv) contractual liability assumed under this contract.
(d) Comprehensive Auto Liability including Personal Injury and Property
Damage in the amount of a combined single limit of not less than $500,000.00
each occurrence. Coverage must include the following:
(i) owned vehicles;
(ii) leased vehicles;
(iii) hired vehicles; and
(iv) non-owned vehicles.
(e) Owner and Contractor Protective Liability including Personal Injury
and Property Damage in the amount of a combined single limit of not less than
$1,000,000.00 each occurrence.
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ARTICLE XII
TENANT'S COVENANTS
12.1. MAINTENANCE AND REPAIR. Except as provided in Sections 6.1 with
respect to maintenance, repair and other such obligations of Landlord and 13.1
with respect to repair and restoration obligations of Landlord arising out of a
fire or other casualty and except as to reasonable wear and tear, Tenant shall:
keep the Premises and all fixtures, equipment and utility systems thereon and
therein in good repair, operating condition and working order; make all
structural, roof, and precast panel repairs necessitated solely by Tenant's
misuse or negligence; make and perform or cause to be made or performed all
interior maintenance, repairs, and replacements necessary to the foregoing
including, without limitation, by their inclusion, interior repainting,
replacement of glass damaged or broken and of floor and wall coverings worn or
damaged, keeping of all roof drains clear of blockage by snow and other
obstructions or debris, and shall keep all plumbing, lighting, elevator,
heating, ventilating, air conditioning and other utility and mechanical systems
in the Premises properly maintained and operated in good operating condition;
and properly maintain the plumbing, lighting, elevator, heating, ventilating,
air conditioning and other utility and mechanical systems in accordance with
manufacturers warranty and product standards
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with fully licensed contractors and under contracts, each reasonably acceptable
to Landlord, qualified to perform the service.
Landlord and its agents reserve the right to inspect the systems to
insure proper maintenance at all reasonable times and upon reasonable notice to
Tenant, and if, in Landlord's reasonable judgment, such systems have not been
properly and adequately maintained, as herein required, then Tenant shall
promptly remedy such maintenance deficiency upon receipt from Landlord of
notification thereof. All reasonable cost of such inspections and maintenance by
Landlord shall be included in Tenant's CAM Fund. To the extent that Landlord is
provided with any assignable warranties with respect to utility or mechanical
systems in the Premises, Landlord agrees to assign same to Tenant. Landlord
agrees to use reasonable efforts to obtain said assignment. If the warranties
are not assignable, Landlord will cooperate with Tenant on the enforcement of
the warranties for Tenant's benefit. Tenant further covenants to (i) neither
commit nor suffer waste and (ii) at the expiration or termination of this Lease
peaceably to yield up the Premises in such order, repair and condition as Tenant
is required to maintain hereunder, first removing all goods and effects of
Tenant which Tenant is required to remove (including any communications
equipment such as antennas and satellite dishes placed on the roof in connection
with Tenant's operation of its
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business, exterior signs relating to the Premises, and, if requested by
Landlord, Tenant's above ceiling communications, computer and/or electrical
wiring) or which Tenant is permitted to remove and desires to remove and (iii)
to repair all damage caused by such removal leaving the Premises clean and neat
and in a tenantable condition.
12.2. SIGNS. Tenant shall not, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed, and so
long as the Tenant leases at least seventy-five percent (75%) of the Building,
(a) paint or place any signs on the Lot or the Premises or anywhere on the
exterior of the Building, or (b) place any curtains, blinds (other than standard
vertical blinds), shades, awnings, or flagpoles, or the like, in the Premises or
anywhere on or in the Building visible from outside the Premises. Tenant shall
pay the expenses involved in the erection of any sign and of obtaining of
permits therefor. Tenant warrants that it shall obtain all necessary permits and
approvals in compliance with local codes and ordinances prior to erecting any
such sign and, at Landlord's request, Tenant shall remove said sign upon the
termination of this Lease.
12.3. ENTRY AND INSPECTION. Tenant shall permit Landlord and
Landlord's agents and invitees at reasonable times and upon reasonable advance
notice, except in emergency, in which case notice may be given by telephone or
in person, during Tenant's
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regular business hours (i) to examine the Premises; and, if Landlord shall so
elect, to make any repairs or replacements, at Tenant's sole cost and expense,
as Landlord may deem necessary, but only to the extent that Landlord is required
to perform the same, or in the case of Tenant's required performance, only upon
the expiration of Tenant's cure periods hereunder, (ii) to make repairs or
replacements, at Landlord's sole cost and expense, as Landlord may otherwise
deem necessary, and (iii) to show the Premises to prospective purchasers,
prospective or actual mortgagees, and prospective or actual institutional
investors; and, at any time within one (1) year preceding the expiration of the
Term, to show the Premises to prospective tenants, and to affix to any suitable
part of the exterior of the Building and/or the Premises, but not so as to
interfere unreasonably with any of the signs or the windows of the Tenant, a
notice to letting or selling the Premises, and to keep the same so affixed
without hindrance.
12.4. MISCELLANEOUS. Tenant agrees during the Term and so long as
Tenant's occupancy continues:
A. Not to permit its employees and officers to use any parking spaces
other than those described in Exhibit "A" and in Section 26.11 hereof, and to
make every reasonable effort to keep its invitees from using any spaces other
than those appurtenant to the Premises; any governmental charges or surcharges
or other monetary obligations imposed relative to
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parking rights with respect to the Premises shall be considered as a Tax Expense
and shall be payable by Tenant under the provisions of Article V, subject to the
Tenant's right to contest the same at Tenant's expense in good faith and by
appropriate proceedings.
B. Not to injure or deface the Premises, or Lot; and not to permit in
the Premises any public auction, nuisance or the emission from the Premises of
any objectionable noise or odor in violation of law; nor any use thereof which
is contrary to law or ordinances or liable to invalidate or materially increase
the premiums for any insurance on the Building or its contents or liable to
render necessary any alteration or addition to the Premises unless Tenant is
willing to pay for, at its sole cost and expense, and conduct such alteration or
addition, including obtaining any and all necessary permits and approvals in
connection with the construction thereof. If such actions do create any extra
premiums for or increase the rate of any such insurance, then the Tenant shall
pay the increased cost of the same either directly to the insurer or to the
Landlord upon written demand therefor, as the case may be.
12.5. SAFETY APPLIANCES. Tenant agrees to keep the interior of the
Building equipped with all safety appliances required by law or ordinance or any
other regulation of any public authority because of Permitted Uses by Tenant and
to procure all licenses and permits so required because of such
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Permitted Uses and, if requested by Landlord, to do any work so required because
of such Permitted Uses, it being understood that the foregoing provisions shall
not be construed to broaden in any way Tenant's Permitted Uses.
12.6. LOADING. Tenant covenants and agrees not to place a load upon the
Premises exceeding 100 pounds live load per square foot of floor area for above
grade portions of the Premises, and 200 pounds live load per square foot of
floor area for at grade slab portions of the Premises.
12.7. LABOR OR MATERIALMEN'S LIENS. Tenant covenants and agrees not to
cause or permit any liens for labor or materials performed or furnished in
connection therewith to attach to the Premises, or in the event of any such lien
promptly after notice to discharge any such liens which may so attach or to bond
the same. Tenant may contest the foregoing in good faith at Tenant's sole
expense and by appropriate proceedings so long as the Landlord's interest in the
Premises is not jeopardized.
12.8. RULES AND REGULATIONS. Tenant agrees to comply with the Rules and
Regulations set forth in Exhibit "F" and all other reasonable Rules and
Regulations hereafter made by Landlord, of which Tenant has been given notice,
for the care and use of the Premises, the Building, the Common Areas and their
facilities and approaches as further described in the Office Park Covenants
attached hereto as Exhibit "G".
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12.9. HAZARDOUS SUBSTANCES. Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or release of any Hazardous
Substances as defined in Article VII hereof, onto or in the vicinity of the
Premises in excess of levels permitted under applicable law, and will not bring
nor allow to be brought any such Hazardous Substances into the Building, Lot or
Premises, except to use in the ordinary course of Tenant's business. Tenant
agrees to provide Landlord, upon Landlord's request, with an inventory of those
certain Hazardous Substances, if any, used by Tenant in the ordinary course of
Tenant's business. Tenant shall not allow the storage or use of such Hazardous
Substances in any manner not sanctioned by law. If any governmental agency or
any lender shall ever require testing to ascertain whether or not there has been
any release of Hazardous Substances in violation of applicable law, then the
reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand
as additional charges only if (i) such requirement applies to the Premises and
(ii) there is a reasonable basis to assume that any such release is a result of
actions or omissions of actions of Tenant, its employees, its agents, its
invitees and/or its independent contractors, or if such release is determined to
be a result of actions or omissions of actions of Tenant, its employees, its
agents, its invitees and/or its independent contractors. If Tenant receives from
any federal, state or local governmental agency any notice
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of violation or alleged violation of any applicable environmental law, or if
Tenant is obligated to give any notice under any of such applicable law, Tenant
agrees to forward to Landlord a copy of any such notice within three (3)
business days of Tenant's receipt or transmittal thereof. In addition, Tenant
shall execute affidavits, representations and the like from time to time at
Landlord's request concerning Tenant's best knowledge or belief regarding the
presence of Hazardous Substances on the Premises. In all events, Tenant shall
indemnify Landlord in the manner provided in Section 16.1 of this Lease from any
release of Hazardous Substances in, on, or under the Premises or elsewhere in
the Park if caused by Tenant (or its employees, its agents, its invitees and/or
its independent contractors). Landlord retains the right to inspect the Premises
at all reasonable times, upon reasonable notice to Tenant, to ensure compliance
with this paragraph. The provisions of this Section 12.9 are subject to the
terms of Article VII, subsection (c) and shall survive the expiration or earlier
termination of this Lease.
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ARTICLE XIII
CASUALTY AND CONDEMNATION
13.1. CASUALTY. In case during the Term, as it may be extended, all or any
substantial part of the Building (i.e., nine (9) months to rebuild the Building)
is damaged by fire or any other casualty ("Substantial Casualty"), then this
Lease shall, except as hereinafter provided, terminate at Tenant's election,
which may be made by notice given to the other within thirty (30) days after the
casualty, which notice of termination shall specify the effective date of
termination which shall not be less than thirty (30), nor more than sixty (60)
days after the date of notice of such termination. In such event, the Fixed Rent
and additional rent shall be fully abated as of the date of such casualty in the
case of a Substantial Casualty as herein defined, or shall be proportionately
abated as of the date of such casualty in the case of a less than Substantial
Casualty as herein defined.
In the event of any fire or casualty to the Building regardless of the
extent, unless the Lease is so terminated, Landlord shall, as promptly as
practicable, repair, replace and restore the Building to substantially the same
condition as it was prior to the casualty for use and occupation to the extent
of such amounts as may be paid by Tenant as hereinafter provided and proceeds of
insurance, less adjuster's fees and other
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reasonable expenses of collection. However, if such damage is not repaired and
the Building restored to substantially the same condition as it was prior to
such damage within nine (9) months from the date of such damage, plus a
reasonable period of time (not exceeding forty-five (45) days after such fire or
other casualty) to recover the insurance proceeds, Tenant, within thirty (30)
days from the expiration of such nine (9) month period or from the expiration of
any extension thereof pursuant to the terms hereof, may terminate this Lease by
notice to Landlord and Landlord's mortgagee, specifying a date not more than
sixty (60) days after the giving of such notice on which the term of this Lease
shall terminate.
Notwithstanding such termination notice by Tenant, in the event Landlord
repairs such damage and restores the Premises to substantially the same
condition prior to such fire or other casualty, during such period as specified
in Tenant's notice, then such notice of termination given by Tenant to Landlord
hereunder shall be null and void and of no further force or effect.
To the extent that Landlord's architect certifies to Tenant prior to
Landlord's commencement of the repair or reconstruction that the reasonable
period for such repair shall exceed nine (9) months, Tenant's option to
terminate after nine (9) months shall be changed to an option to terminate in
nine (9) months plus the number of months in excess of nine (9) months shown on
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Landlord's architect's certificate plus the extensions hereinbefore described.
The period within which the required repairs may be accomplished shall also be
extended by the number of days lost as a result of "unavoidable delays", which
term shall be defined to include all delays referred to as Force Majeure in
Section 9.5 and as Tenant's Delay days in Section 9.2, but shall exclude the
period of time necessary to recover insurance proceeds.
Notwithstanding the foregoing, if there occurs a Substantial Casualty to
the Building and less than three (3) years then remain in the initial Term, or
in any of the Extended Terms, as the case may be, Landlord may terminate this
Lease by notice to Tenant except that Tenant may render Landlord's notice of
termination nugatory by exercising early its option to extend this Lease in
accordance with Section 3.2 to extend the initial Term or First Extended Term,
as the case may be, of this Lease for five (5) additional years. In the event of
such early exercise, Landlord and Tenant agree to determine the Fixed Rent for
the Extended Terms twelve (12) months prior to the commencement date of the
Extended Terms in the manner set forth in Section 3.2.
Tenant shall, in any fire or other casualty which creates a Landlord repair
obligation in accordance with the terms of this Article, pay to Landlord prior
to Landlord commencing construction of such repair the then applicable insurance
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deductible plus any costs, as reasonably estimated by Landlord's architect, in
excess of the net proceeds to complete such repair, as a result of Tenant's
failure to adequately insure the Building (including the Tenant's Work), as the
case may be pursuant to the provisions of Article XV hereof, and/or as a result
of Tenant's election to make changes to the scope of the Landlord's Work and/or
the Tenant's Work from the original Landlord's Work and/or Tenant's Work
installed hereunder. Nothing herein shall be construed to limit Landlord's
obligation or Tenant's obligation, as the case may be, to insure the Building
for the full replacement cost as specified in Article XV hereof.
Landlord and Tenant further agree to cooperate with each other so as to
maximize any and all awards of insurance that may be payable under this Lease.
13.2. ADDITIONAL CASUALTY PROVISIONS.
(a) Landlord shall not be required to repair or replace any of Tenant's
business machinery, equipment, cabinet work, furniture, or personal property and
no damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Premises.
(b) In the event of any termination of this Lease pursuant to this Article
XIII, the Term of this Lease shall expire as of the effective termination date
as fully and completely as if
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such date were the date herein originally scheduled as the Term Expiration Date
and Landlord should assist Tenant to the extent necessary to secure Tenant's
share of any insurance award relative to Tenant's Work hereunder. Tenant shall
have access to the Premises at Tenant's sole risk for a period of thirty (30)
days after the date of termination in order to remove Tenant's personal property
except as prohibited by any applicable governmental agency or official.
In addition, in the event of a termination of this Lease as aforesaid,
Landlord agrees to allocate any such insurance award in the manner expressly
provided for in the award furnished to Landlord or in the policy schedule or, if
such award and/or schedule is not expressly itemized, then Landlord agrees,
during the initial Term, to pay to Tenant after deducting from any insurance
award the amount then due to Landlord's mortgagee(s), (but not in excess of the
outstanding debt), the amount paid by Tenant to Landlord for the Tenant's Work
hereunder multiplied by a fraction, the numerator of which is the remaining
months in the initial Term and the denominator of which is one hundred and
eighty (180). With respect to any Alterations paid for by Tenant exceeding two
hundred fifty thousand dollars ($250,000.00) in any year of the Term less any
replacements to the Tenant's Work due to such Alterations, Landlord agrees to
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pay to Tenant after the aforesaid deductions the amount of such aggregate
Alterations multiplied by the following fraction:
180 - (the number of months that have occured during the initial Term or
Extended Term, as the case may be, from substantial completion of the
Alterations to the date of the casualty event)
180
(see Exhibit "Q" attached hereto for an example of this calculation). The
remainder of any such award shall be paid to Landlord, or its mortgagee(s), as
their interests may appear. Notwithstanding any language to the contrary,
Landlord's obligation to pay to Tenant any of such portion of the award
described in this paragraph shall be limited to the extent such proceeds are
actually received by Landlord.
13.3. CONDEMNATION - EMINENT DOMAIN. In the event that the whole or
substantially all of the Building shall be permanently taken or appropriated by
eminent domain or shall be condemned for any public or quasi-public use, then
(and in any such event) this Lease and the Term hereof shall automatically be
terminated as of the date determined as hereinafter set forth.
In the event that more than a material part (greater than twenty-five
percent (25%)) of the floor area of the Building, or any material part of the
means of access thereto or parking ("material" in the case of parking shall mean
the reduction of parking spaces to less than 2.8 parking spaces per 1,000 square
feet of Building), so as to substantially interfere with the use of the Building
shall be so taken, appropriated or condemned for
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a period in excess of one (1) year, then (and in any such event) this Lease and
the term hereof may be terminated at the election of Tenant by a notice in
writing of its election so to terminate which shall be given by Tenant to
Landlord within sixty (60) days following the effective date of such taking,
appropriation or condemnation. Landlord may suspend the effectiveness of such
notice by giving its own notice to Tenant within five (5) days of receipt of
Tenant's notice that Landlord shall either (i) remove the impairment to Tenant's
use of the Building by repairing the Building as soon as practicable or (ii)
provide substitute parking spaces equal to the number taken within reasonable
proximity to the Premises within a reasonable time period, it being agreed that
reasonable time includes weather related delays associated with winter and
spring site work and paving.
This Lease and the term hereof shall terminate upon the giving of any such
notice of termination by Tenant at Tenant's election, at such later date not
later than the date on which Tenant shall be required to vacate any part of the
Premises or shall be deprived of a substantial part of the means of access
thereto as Tenant may specify by notice to Landlord. In the event of any such
termination, this Lease and the term hereof shall expire as of the effective
termination date as fully and completely as if such date were the date herein
originally scheduled as the Term Expiration Date.
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If this Lease is not terminated as above set forth, Landlord shall, with
reasonable diligence and up to the amount of the award, restore the remainder of
the Premises, and the remainder of the means of access, as nearly as practicably
may be to the same condition as obtained prior to such taking, appropriation or
condemnation in which event (i) a just proportion of the Fixed Rent and
additional rent, according to the nature and extent of the taking, appropriation
or condemnation and the resulting permanent injury to the Premises and the means
of access thereto and parking shall be permanently abated, and (ii) a just
proportion of the remainder of the Fixed Rent and additional rent, according to
the nature and extent of the taking, appropriation or condemnation and the
resultant injury sustained by the Premises and the means of access thereto and
parking shall be abated until what remains of the Premises and the means of
access thereto and parking, shall have been restored as fully as may be for
permanent use and occupation by Tenant hereunder. In the event of any taking of
the Premises or any part thereof for temporary use for less than one (1) year,
(i) this Lease shall be and remain unaffected thereby, and (ii) Landlord shall
pay to Tenant any award made for such use, provided that if any taking is for a
period extending beyond the Term of this Lease, such award shall be apportioned
between Landlord and Tenant as of the Term Expiration Date.
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13.4. RESERVATION OF AWARD. Except as hereafter set forth, Landlord
reserves to itself any and all rights to receive awards made for damages to the
Premises, Building or Lot and the leasehold hereby created, or any one or more
of them, accruing by reason of exercise of eminent domain or by reason of
anything lawfully done in pursuance of public or other authority, and Tenant
hereby releases and assigns to Landlord all Tenant's rights to such awards, and
covenants to deliver such further assignments and assurances thereof as Landlord
may from time to time request. It is agreed and understood, however, that
Landlord does not reserve to itself, and Tenant does not assign to Landlord, any
damages payable for (i) moveable trade fixtures or other leasehold improvements
(expressly excluding any Tenant's Work hereunder) installed by Tenant or anybody
claiming under Tenant, at its own expense, or (ii) relocation expenses
recoverable by Tenant from such authority in a separate action.
Notwithstanding the foregoing, Landlord agrees that the award from any
permanent taking shall, during the initial Term, be allocated between Landlord
and Tenant in the manner expressly provided for in the award furnished to
Landlord, or, if such award is not expressly itemized, then in the following
manner: first, to Landlord's mortgagee(s) in an amount not to exceed the
outstanding debt; then, to the Tenant an amount equal to the amounts paid by
Tenant to Landlord for Tenant's Work hereunder multiplied by a fraction, the
numerator of which is the number
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of months remaining in the initial Term and the denominator of which is one
hundred eighty (180); or in the case of Alterations paid for by Tenant exceeding
two hundred fifty thousand dollars ($250,000.00) in any year of the Term less
any replacements to the Tenant's Work due to such Alterations, Landlord agrees
to pay to Tenant after the aforesaid deductions the amount of such aggregate
Alterations multiplied by the following fraction:
180 - (the number of months that have occured during the initial Term or
Extended Term, as the case may be, from substantial completion of the
Alterations to the date of the condemnation event)
180
(see Exhibit "Q" attached hereto for an example of such calculation); to the
Landlord that portion of any remaining award. Notwithstanding any language to
the contrary, Landlord's obligations to pay to Tenant any of such portion of the
award described in this paragraph shall be limited to the extent such proceeds
are actually received by Landlord.
ARTICLE XIV
RIGHTS OF MORTGAGEES
14.1. PRIORITY OF LEASE. This Lease shall be subject and subordinate to the
lien of any mortgage of the Premises (the "Mortgaged Premises"), provided that a
Subordination, Non-Disturbance and Attornment Agreement ("Agreement") is
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executed, acknowledged and delivered by such mortgagee to Tenant. Said Agreement
must be in the form attached hereto as Exhibit "J".
14.2. LIMITATION ON MORTGAGEE'S LIABILITY. Upon entry and taking possession
of the mortgaged premises for any purpose other than foreclosure, the holder of
a mortgage shall have all rights of Landlord and, during the period of such
possession or ownership, the duty to perform all Landlord's obligations
hereunder. Except during such period of possession and from and after
foreclosure or deed in lieu of foreclosure, no such holder shall be liable,
either as mortgagee or as holder of a collateral assignment of this Lease, to
perform, or be liable in damages for failure to perform, any of the obligations
of Landlord, unless and until such holder shall enter and take possession of the
mortgaged premises for the purpose of foreclosing a mortgage. Upon entry for the
purpose of foreclosing a mortgage, such holder shall be liable to perform all of
the obligations of Landlord accruing after said entry, provided that a
discontinuance of any foreclosure proceeding shall terminate the liability of
the holder as Landlord.
14.3. MORTGAGEE'S ELECTION. Notwithstanding any other provision to the
contrary contained in this Lease if, prior to the Substantial Completion of
Landlord's obligations under Article IX, any holder of a mortgage on the
mortgaged premises enters and takes possession thereof for the purpose of
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foreclosing the mortgage, such holder may elect, by written notice given to
Tenant and Landlord at any time within 90 days after such entry and taking of
possession, not to perform Landlord's obligations under Article IX, and in such
event such holder and all persons claiming under it shall be relieved of all
obligations to perform, and all liability for failure to perform, said
Landlord's obligations under Article IX, and Tenant may terminate this Lease and
all its obligations hereunder by written notice to Landlord and such holder
given within 30 days after the day on which such holder shall have given its
notice as aforesaid.
14.4. NO PREPAYMENT OR MODIFICATION, ETC. No Fixed Rent, additional rent,
or any other charge shall be paid more than thirty (30) days prior to the due
dates thereof, and payments made in violation of this provision shall (except to
the extent that such payments are actually received by a mortgagee in possession
or in the process of foreclosing its mortgage) be a nullity as against such
mortgagee, and Tenant shall be liable to such mortgagee for the amount of such
advance payments made from and after a default under the applicable Mortgage. No
agreement to make or accept any surrender, termination or cancellation of this
Lease and no agreement to modify so as to reduce the rent, change the Term, or
otherwise materially change the rights of Landlord under this Lease, or to
relieve Tenant of any obligations or liability under this Lease, shall be
binding on
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mortgagee unless consented to in writing by Landlord's mortgagees of record of
whom Tenant has received notice (which such notice shall include the address of
such mortgagee(s)) from Landlord, if any, which such consent is not to be
unreasonably withheld or delayed.
14.5. NO RELEASE OR TERMINATION. No act or failure to act on the part of
Landlord which would entitle Tenant under the terms of this Lease, or by law, to
be relieved of Tenant's obligations hereunder or to terminate this Lease, shall
result in a release or termination of such obligations or a termination of this
Lease unless (i) Tenant shall have first given written notice of Landlord's act
or failure to act to Landlord's mortgagees of record, if any, which Landlord
shall identify to Tenant, specifying the act or failure to act on the part of
Landlord which could or would give a basis to Tenant's rights and (ii) such
mortgagees, after receipt of such notice, have failed or refused to correct or
cure the condition complained of within a reasonable time thereafter, but
nothing contained in this Section 14.5 shall be deemed to impose any obligation
on any such mortgagee to correct or cure any such condition. "Reasonable time"
as used above means and includes a reasonable time to obtain possession of the
mortgaged premises, if necessary for such cure, and if the mortgagee elects to
do so, and a reasonable time to correct or cure the condition if such condition
is determined to exist; however, such time shall not
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extend beyond sixty (60) days after the expiration of all time periods required
for such cure by Landlord under this Lease.
14.6. CONTINUING OFFER. The covenants and agreements contained in this
Lease with respect to the rights, powers and benefits of a mortgagee
(particularly without limitation thereby, the covenants and agreements contained
in this Article XIV) constitute a continuing offer to any person, corporation or
other entity, which by accepting or requiring an assignment of this Lease or by
entry or foreclosure assumes the obligations herein set forth with respect to
such mortgagee; such mortgagee is hereby constituted a party of this Lease and
an obligee hereunder to the same extent as though its name was written hereon as
such; and such mortgagee shall be entitled to enforce such provisions in its own
name.
ARTICLE XV
INSURANCE
15.1. INSURANCE. Except if Tenant exercises its election as set forth
herein, Landlord shall procure and continue in force during the Term and the
Extended Terms hereof at Tenant's expense under the provisions of Article V,
fire and extended coverage insurance, including vandalism, sprinkler leakage,
and malicious mischief, upon the Building on a full replacement cost basis,
agreed cost value endorsement with agreed values for the
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Building and other tenant improvements and alterations, as determined annually
by the Landlord's insurer. The beginning coverage shall be in the amount as is
required by Landlord and its mortgagee up to the full replacement value, and
such coverage shall not, without the written consent of the Landlord and
Landlord's mortgagee, be reduced below that amount. Such coverage shall also
provide that in the event of a casualty or taking and Landlord's failure to
repair or restore the Building as herein provided, then the full replacement
cost of the Building (and not only the "cash value") shall be payable as a loss
thereunder.
Except as otherwise set forth herein, Landlord shall also procure and
continue in force during the Term and Extended Term hereof at Tenant's expense
under the provisions of Article V, rental interruption insurance for twelve (12)
months.
The policies evidencing such insurance shall provide that loss, if any,
payable thereunder shall be payable to the Landlord and/or the Tenant and/or any
mortgagee of the Premises as their respective interests may appear. A
certificate of insurance evidencing the foregoing shall be delivered to the
Tenant. All such policies shall be placed with responsible companies authorized
to do business in the State wherein the Premises are located. The coverages
required by this Article may be provided by a single "package" policy.
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At any time during the Term of this Lease, including any of the Extended
Terms, Tenant shall have the election (exercisable by giving written notice
thereof to Landlord), to procure, on its own behalf, rather than by Landlord as
herein provided, and continue in force during the Term and Extended Terms
hereof, as the case may be, such insurance as specified in this Section 15.1,
and/or in Section 15.2 below, provided that (i) such insurance shall be at
Tenant's sole cost and expense (and not allocated to Tenant in the manner
specified in Article V hereof), (ii) such certificates of insurance evidencing
the foregoing shall be delivered to the Landlord and/or Landlord's mortgagee(s)
and shall name Landlord and its mortgagee(s) as additional named insureds, and
(iii) such insurance shall be in full force and effect prior to the cancellation
of the insurance procured and maintained by Landlord hereunder such that there
shall be no "gaps" in any required coverage hereunder, and (iv) that Tenant
complies with any other reasonable requirements imposed by Landlord's
mortgagee(s) upon notification by Landlord; provided, however, that in the event
that Tenant is unable to procure and continue any of such required insurance
during the Term of this Lease or any Extended Term hereunder, then Tenant shall
notify Landlord of same, whereupon Landlord shall procure and maintain such
insurance on Tenant's behalf and at Tenant's cost and expense pursuant to the
provisions of Article V hereof. Upon receipt of a copy of notice of
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cancellation of any insurance which is or may be the responsibility of the
Tenant hereunder, the Landlord may pay the premiums necessary to reinstate the
same. Payment of premiums by the Landlord shall not be deemed a waiver or
release by the Tenant of the default by the Tenant in failing to pay the same or
of any action which the Landlord may take hereunder as a result of such default.
The Tenant shall not violate and shall diligently attempt to prevent its agents,
servants, and employees from violating any of the terms, conditions and
provisions of such policies.
15.2. TENANT LIABILITY INSURANCE. Except as otherwise set forth in Section
15.1 above (i.e., Tenant elects to procure and maintain such insurance on its
own behalf), the Landlord shall maintain, on behalf of Tenant and at Tenant's
expense under the provisions of Article V, Commercial General Liability
Insurance, including contractual liability endorsement, with respect to the
Premises throughout the Term with combined single limit coverage of Two Million
Dollars ($2,000,000.00). In the event that the Tenant elects to procure and
maintain such insurance as hereinabove set forth, rather than Landlord, then
Tenant shall deliver to the Landlord within thirty (30) days of Landlord's
request a certificate evidencing the aforesaid coverage issued by insurance
companies authorized to do business in the State wherein the Premises are
located, providing that the insurance indicated therein shall not be cancelled
without at least thirty
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(30) days prior written notice to Landlord, and naming Landlord and its
mortgagee as additional named insureds.
15.3. WAIVER OF SUBROGATION. The Landlord and Tenant hereby waive all
causes and rights of recovery against each other, their agents, officers and
employees for any loss occurring to the real or personal property of Landlord or
Tenant, regardless of cause or origin. Landlord and Tenant agree that any
policies presently existing or obtained on or after the date hereof (including
renewals of present policies) shall include 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 insured to recover thereunder. The parties further
agree that if said waiver of subrogation shall become unobtainable or
unenforceable or shall void the respective policies, then their respective
insurance policies shall not be invalidated, and said waiver shall become null
and void and of no further force and effect.
ARTICLE XVI
INDEMNIFICATION
16.1. TENANT'S INDEMNIFICATION. In addition to the provisions of Section
12.9, the Tenant shall, upon timely receipt of notice, defend and save the
Landlord harmless from and against any and all suits, claims, and demands
arising out of injury or damage occurring at the Premises or Lot or Office
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Park because of the negligence or willful acts of Tenant, its agents, servants,
or employees including any construction activity undertaken by Tenant pursuant
to the terms of this Lease. In no event is Tenant obligated to defend or save
harmless Landlord from any loss, injury, or damage, or part thereof, not
attributable to Tenant's negligence or willful act or those of its agents,
servants, or employees.
In the event the Landlord is notified of a claim, action or proceeding, or
becomes aware of an occurrence, which may result in indemnification by Tenant as
provided above, the Landlord shall give prompt written notice to Tenant and
provide complete particulars known by the Landlord. The Landlord shall
immediately forward to the Tenant every demand, notice, summons or other process
received by Landlord or his representatives.
Tenant has the exclusive right and obligation to defend any claim, action,
or proceeding wherein Landlord is entitled to indemnification under the
provisions of this Article, and Tenant may settle any such claim, action, or
proceeding without Landlord's consent or approval.
The Landlord will fully cooperate with the Tenant in the defense or
settlement of any claim, action, or proceeding.
16.2. LANDLORD'S INDEMNIFICATION. In addition to the provisions of Article
VII, subsection (c) of this Lease, the Landlord shall, upon timely receipt of
notice, defend and save the Tenant harmless from and against any and all suits,
claims,
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and demands arising out of injury or damage occurring at the Premises or Lot or
Office Park because of the negligence or willful acts of Landlord, its agents,
servants, or employees. In no event is Landlord obligated to defend or save
harmless Tenant from any loss, injury, or damage, or part thereof, not
attributable to Landlord's negligence or willful act or those of its agents,
servants, or employees, except as otherwise set forth in said Article VII,
subsection (c) hereof.
In the event the Tenant is notified of a claim, action or proceeding, or
becomes aware of an occurrence, which may result in indemnification by Landlord
as provided above, the Tenant shall give prompt written notice to Landlord and
provide complete particulars known by the Tenant. The Tenant shall
immediately forward to the Landlord every demand, notice, summons or other
process received by Tenant or his representatives.
Landlord has the exclusive right and obligation to defendany claim,
action, or proceeding wherein Tenant is entitled to indemnification under the
provisions of this Article, and Landlord may settle any such claim, action, or
proceeding without Tenant's consent or approval.
The Tenant will fully cooperate with the Landlord in the defense or
settlement of any claim, action, or proceeding.
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ARTICLE XVII
ASSIGNMENT AND SUBLETTING
17.1. TENANT SUBLET. Landlord hereby grants to Tenant the right to
assign this Lease or to sublet all or any portion ofthe Premises throughout the
Term, as it may be extended, provided Tenant first obtains Landlord's consent to
such assignment or subletting in writing. Landlord's consent shall not be
unreasonably withheld or delayed. However, Landlord may withhold consent if in
Landlord's reasonable judgment such subtenant's or assignee's proposed use is
not compatible with a first class suburban office park (i.e. a use made in the
Premises which is improper, noisy or offensive or is contrary to any law or any
municipal by-law or ordinance), notwithstanding that the proposed use by such
subtenant or assignee, as the case may be, may be in conformance with the
Permitted Uses.
Landlord's consent or refusal of consent shall be in writing and, if Landlord
refuses consent, the reasons for such refusal are to be stated with
particularity. Landlord's consent to an assignment or subletting shall be
accompanied by a statement addressed to Tenant and the assignee or subtenant,
upon which statement Tenant and the assignee or subtenant may conclusively rely,
stating that Tenant is not in default under the Lease (or setting forth what
respects Tenant is in default), that this Lease has not been amended or modified
(or setting forth such
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amendments or modifications), the expiration date of this Lease, and the date to
which rent has been paid to Landlord hereunder. As additional rent, Tenant shall
reimburse Landlord promptly for reasonable legal and other expenses incurred by
Landlord in connection with any request by Tenant for consent to assignment or
subletting. No assignment or subletting shall affect the continuing primary
liability of Tenant (which, following assignment, shall be joint and several
with the assignee).
17.2. LANDLORD'S RESPONSE. In the event Landlord does not respond to
the written request for such consent within fifteen (15) days of the date of
such request from Tenant, Landlord's consent is hereby deemed given.
17.3. SUBSIDIARY ASSIGNMENT. Notwithstanding anything to the contrary
herein contained, Tenant may assign or sublet all or any portion(s) of the
Premises at any time to a subsidiary of Tenant, to the entity with which or into
which Tenant may merge, to any entity with which Tenant is affiliated, or to a
successor to all or substantially all the assets of Tenant or a division of
Tenant or a joint venture in which Tenant owns at least fifty percent (50%)
without the need for Landlord's consent to such assignment or subletting, so
long as Tenant remains primarily liable, and without any obligation of Tenant to
share Rent Differential as set forth in Section 17.4.
17.4. SUBLEASE AND ASSIGNMENT RENT DIFFERENTIAL. If Landlord consents
to sublease or assignment, and said sublease
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or assignment is for a greater rent than the Fixed Rent or additional rent due
from Tenant to Landlord under this Lease, Tenant shall pay to Landlord on a
monthly basis during the term of any approved sublease or assignment as
additional rent hereunder, in addition to the Fixed Rent and other payments due
under this Lease, an amount equal to fifty percent (50%) of the difference
between all fixed rent and additional rent due under the sublease or assignment
and the Fixed Rent and additional rent and other payments due under this Lease,
after Tenant has recouped its out-of-pocket expenses with respect to such
sublease or assignment including without limitation, reasonable real estate
brokerage commissions, reasonable legal fees and the reasonable costs of
refurbishment of the Premises for such sublease or assignment (the "Rent
Differential"). In case any Fixed Rent or additional rent is prepaid to Tenant
under the sublease or assignment, only so much as exceeds the net present value
of Tenant's obligations to pay Fixed Rent and additional rent (reasonably
estimated) for the balance of the Term for the portion of the Premises subject
to such sublease or assignment shall be taken into account in computing the Rent
Differential or the amounts due any foreclosing mortgagee or other successor
landlord under the next succeeding sentence. In the event that a tax exempt
entity becomes a mortgagee in possession or a landlord under this Lease through
foreclosure or deed in lieu of foreclosure by reason of a default under the
applicable mortgage
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or through a participating mortgage transaction or otherwise, and such successor
landlord approves a sublease or assignment which provides for a greater rent
than the Fixed Rent and additional rent due hereunder, Tenant shall pay to such
successor landlord on a monthly basis during the term of any approved sublease
or assignment as additional rent hereunder, in addition to the Fixed Rent and
other payments due under this Lease, an amount equal to fifty percent (50%) of
the difference between all fixed rent and additional rent due under the sublease
or assignment and the Fixed Rent and other payments due under this Lease. In
calculating the amount due in the immediately preceding sentence, there shall be
no credit given to Tenant for its out-of-pocket expenses involved in such
assignment or subletting. In the event the sublease is for less than the full
Premises hereunder, the above rent adjustment shall be pro rated on a square
foot basis. Anything contained in the foregoing provisions of this Section to
the contrary notwithstanding, neither Tenant nor any other person having
interest in the possession, use, occupancy, or utilization of the Premises shall
enter into any lease, sublease, license, concession, or other agreement for use,
occupancy, or utilization of space in the Premises which provides for rental or
other payment for such use, occupancy, or utilization based, in whole or in
part, on the net income or profits derived by any person from the Premises
leased, used, occupied, or utilized
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(other than an amount based on a fixed percentage or percentages of receipts or
sales), and any such purported lease, sublease, license, concession, or other
agreement shall be absolutely void and ineffective as a conveyance of any right
or interest in the possession, use, occupancy, or utilization of any part in the
Premises.
ARTICLE XVIII
TENANT'S PROPERTY
18.1. TENANT'S PERSONAL PROPERTY. Tenant's trade fixtures and personal
property, (collectively called "Tenant's Property"), however installed or
located on the Premises, shall be and remain the property of the Tenant and may
be removed in accordance with the provisions of Article IX. Tenant shall repair
any damage caused by such removal or installation, leaving the Premises
tenantable. Tenant's Property shall be at the sole risk and hazard of Tenant,
and if the whole or any part thereof shall be destroyed or damaged by fire,
water or otherwise, or by the leakage or bursting of water pipes, steampipes or
other pipes, by theft or from any other cause, unless caused by the negligence
of Landlord, its employees or agents, no part of said loss or damage is to be
charged to or be borne by Landlord.
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18.2. REMOVAL. Upon the expiration or termination of this Lease, the
Tenant will remove Tenant's Property from the Premises; if within fifteen (15)
days after such expiration or termination, Tenant shall not have removed same it
shall be deemed abandoned by Tenant. Tenant shall pay to Landlord upon demand
the costs and expenses thereafter incurred by Landlord in removing and storing
Tenant's Property and repairing any damage caused to the Premises or to the
Building by the removal of same.
18.3. NO LIEN. In no event (including a default under this Lease)
shall Landlord have any lien or other security interest in any of Tenant's
Property located in the Premises or elsewhere and Landlord hereby expressly
waives and releases any such lien or other security interest however created or
arising.
ARTICLE XIX
TENANT'S DEFAULT
19.1. EVENTS OF DEFAULT. Any of the following shall be an Event of
Default under this Lease:
(a) If the Tenant shall default in the payment of rent or other
payments required by this Lease and shall fail to cure said default
within five (5) business days after written notice of said default
from the Landlord; or
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(b) if the Tenant shall default in the performance or observance of
any other agreement or condition on its part to be performed or
observed, and if the Tenant shall fail to cure said default within
thirty (30) days after receipt of written notice of said default
from the Landlord (or if said default shall require longer than
thirty (30) days to cure and the Tenant fails to commence curing
said default within thirty (30) days after receipt of written
notice thereof and to prosecute the curing of the same to
completion with due diligence); or
(c) if the Tenant shall file a voluntary petition in bankruptcy or
shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking any arrangement, composition,
liquidation or dissolution under any present or future Federal,
State, or other statute, law or regulation relating to bankruptcy,
insolvency or other relief for debtors, or shall seek or consent to
or acquiesce in the appointment of any trustee, receiver or
liquidator of the Tenant or of all or any substantial part of its
properties, or of the Premises, or shall make any general
assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due; or
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(d) if a court shall enter an order, judgment or decree approving a
petition filed against the Tenant seeking any arrangement,
composition, liquidation, dissolution or similar relief under the
present or future Federal, State or other statute, law or
regulation relating to bankruptcy, insolvency or other relief for
debtors, and such order, judgment or decree shall remain unvacated
or unstayed for an aggregate of sixty (60) days (whether or not
consecutive).
If any Event of Default has occurred, the Landlord at any time
thereafter may give written notice to the Tenant specifying the occurrence
giving rise to such default and stating that this Lease and the Term hereby
demised shall expire and terminate on the date specified in such notice which
shall be at least ten (10) days after the giving of such notice, and upon the
date specified in such notice, this Lease and the Term, estate and interest
hereby demised shall expire and terminate by limitation and all rights of the
Tenant under this Lease shall cease. In the event that this Lease is terminated
on account of a default of Tenant under any of the provisions contained in this
Article or shall be otherwise terminated for breach of any obligation of Tenant,
Tenant shall pay as an additional and cumulative obligation after such
termination punctually to Landlord all the sums which Tenant covenants in this
Lease to pay and the reasonable costs of performing Tenant's obligations under
this
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Lease in the same manner and to the same extent and at the same time as if this
Lease had not been terminated.
19.2. REPOSSESSION. At any time after any such expiration or
termination of this Lease, the Landlord, without further notice, may enter upon
and reenter the Premises to repossess itself of the Premises, by summary
proceedings, ejectment or otherwise, and may remove the Tenant and all other
persons and any and all property from the Premises as hereinabove provided.
ARTICLE XX
NOTICES
20. NOTICES. All notices, demands, requests and other instruments
which may or are required to be given by either party to the other under this
Lease shall be given in writing. All notices, demands, requests and other
instruments from the Landlord to the Tenant shall be deemed to have been given
when mailed by United States Registered or Certified Mail, postage prepaid,
return receipt requested, by hand delivery, courier service, or overnight
delivery service with a receipt addressed to the Tenant at Tenant's Address set
forth in Section 1.1 of this Lease, with a copy to Robert A. Fishman, Esq.,
Nutter McClennen & Fish, LLP, One International Place, Boston, MA 02110, and
addressed to the Landlord at Landlord's address set forth in Section 1.1 of this
Lease, with a copy to Paul A.
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Hedstrom, Esq., Hinckley, Allen & Snyder, One Financial Center, Suite 4600,
Boston, MA 02111; except that where any period of time commences under this
Lease with notice, such notice shall be deemed given, and such period shall be
deemed to commence, when postal records indicate delivery was first attempted,
and notices by hand delivery or courier service or overnight delivery service
shall be deemed served when delivered or tendered for delivery if refused.
ARTICLE XXI
QUIET ENJOYMENT
Landlord covenants and agrees with Tenant that upon Tenant paying the
rent and additional rent and observing the terms, covenants and conditions on
Tenant's part to be observed and performed hereunder, Tenant may, at all times
during the Term of this Lease, have the right to peaceably and quietly have,
hold, occupy and enjoy the Premises demised hereby without hindrance or
molestation from Landlord or any person claiming by, from or under Landlord.
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ARTICLE XXII
HOLDING OVER
Upon failure to vacate the Premises on the Term Expiration Date, Tenant
shall pay to Landlord one-hundred and fifty percent (150%) of the total of the
Fixed Rent and additional rent then applicable for each month or portion thereof
in which Tenant shall retain possession of the Premises or any part thereof
after the termination of this Lease, whether by lapse of time or otherwise, and
also shall pay all damages (including consequential damages, if any) sustained
by Landlord on account thereof; provided, however, that in the event of a Tenant
holdover resulting from a cause beyond the reasonable control of Tenant, not to
exceed sixty (60) days, Tenant shall pay to Landlord (i) one hundred twenty-five
(125%) of the Fixed Rent and additional rent due hereunder and no consequential
damages for the initial thirty (30) days and (ii) three hundred percent (300%)
of the Fixed Rent and additional rent due hereunder and no consequential damages
for the succeeding thirty (30) days, and Tenant shall comply with all other
terms and conditions of this Lease other than the foregoing portions of this
Article XXII as if the Lease had remained in full force and effect. The
provisions of this Article XXII shall not operate as a waiver by Landlord of any
right of re-entry provided in this Lease.
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ARTICLE XXIII
MEMORANDUM OF LEASE
Within a reasonable time following the execution of this Lease, Landlord
and the Tenant shall execute an instrument recordable in form containing those
provisions including but not limited to the Term, the commencement and
expiration date, and such other information as necessary or appropriate to
protect the interests of Tenant hereunder and to satisfy the notice of lease
statute of the State where the Premises are located. The Tenant may record the
same. The provisions of this subsection shall not operate as a waiver by
Landlord of any right of re-entry provided in this Lease.
ARTICLE XXIV
SURRENDER OF PREMISES
Upon the expiration of the Term or early termination thereof, Tenant
shall promptly peaceably yield up and surrender the Premises in a good and clean
condition, and in the same condition as Tenant is required to maintain the
Premises hereunder during the Term, ordinary wear and tear and damage by
casualty excepted.
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ARTICLE XXV
ESTOPPEL CERTIFICATES
Upon the request of either party, at any time and from time to time,
Landlord and Tenant agree to execute and deliver to the other within fifteen
(15) business days after receipt of such request, a written instrument, duly
executed in the form attached hereto as Exhibit "I".
ARTICLE XXVI
ADDITIONAL PROVISIONS
26.1. BROKER. Landlord and Tenant warrant to each other that the only
Broker(s) ("Broker(s)") that have been retained in connection with the
negotiation and consummation of this Lease are R.W. Altreuter of Whittier
Partners and Bruce Grean of The Leggatt Company. Landlord covenants that it
shall pay any and all commissions, fees and amounts owing to the Broker(s)
arising from the negotiation and/or consummation of this Lease. Each party
agrees to defend, indemnify and save the other harmless from and against any and
all claims for a commission arising out of a breach of the representation made
in the first sentence of this Section 26.1. The within covenant shall survive
the expiration or earlier termination of this Lease.
26.2. BIND AND INURE. The obligations of this Lease shall run with the
land, and this Lease shall be binding upon and
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inure to the benefit of the parties hereto and their respective successors and
assigns except that only the Landlord named herein shall be liable for
obligations accruing before the beginning of the Term and thereafter each
successive owner of the Premises shall be liable only for obligations accruing
during the period of its ownership, said liability terminating as to future
liability upon termination of such ownership and passing to the successor in
ownership.
26.3. PROVISIONS SEPARABLE. It is agreed that if any provisions of
this Lease shall be determined to be void by any court of competent jurisdiction
in the State where the Premises are located, then such determination shall not
affect any other provision of this Lease, all of which other provisions shall
remain in full force and effect; and it is the intention of the parties hereto
that if any provision of this Lease is capable of two constructions, one of
which would render the provision void, and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
26.4. ENTIRE AGREEMENT. This instrument contains the entire and only
agreement between the parties as to the Premises, and no oral statements or
representations or prior written matter not contained in this instrument shall
have any force or effect. This Lease shall not be modified in any way except by
a writing subscribed by both parties.
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26.5. RIGHT OF FIRST OFFER.
Landlord hereby grants to Tenant the following rights with regard to the
fee interest in the Premises and a ground leasehold estate in the Lot
(collectively, the "Offer Property") or any portion thereof so long as in any
case (i) there does not then exist an Event of Default by Tenant under this
Lease or any lease with Tenant for any other space within the Office Park,
including but not limited to the lease for Building Eight of the Office Park,
and (ii) the Tenant specified in Section 1.1 hereof is then leasing at least
seventy-five percent (75%) of the Building.
In the event Landlord shall (i) decide to offer for sale the Offer
Property, or any portion thereof, Landlord shall forthwith give notice to Tenant
of its intention to sell the same, together with a proposed purchase price or
lease terms. Tenant shall have the right, for a period of thirty (30) days
after such notice of intention to sell or lease, to notify Landlord of Tenant's
interest in purchasing or leasing the same at said price or lease terms
specified in Landlord's notice or at such other price or lease terms specified
by Tenant (the "Tenant's Offer Notice"). If (i) Tenant so notifies Landlord,
and (ii) Landlord and Tenant agree on a purchase price or lease terms, and on
such other terms and conditions of purchase and sale or leasing within twenty
(20) days of Tenant's Offer Notice by executing a mutually agreeable purchase
and sale agreement or
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lease, then Tenant shall post with Landlord a ten percent (10%) non-refundable
deposit and the Offer Property, or such portion thereof, shall be sold or leased
by Landlord to Tenant, in the same condition as at the time of the posting of
the deposit, within ninety (90) days upon execution of a mutually agreeable
purchase and sale agreement or lease at the price or lease terms and upon those
other terms and conditions identified thereunder.
If Landlord does not accept Tenant's price or lease terms specified in
Tenant's Offer Notice, Landlord shall specify a final price or lease terms to
Tenant (the "Landlord's Price or Lease Terms") by giving written notice thereof
to Tenant ("Landlord's Notice"). If (i) Landlord so notifies Tenant, and (ii)
Landlord and Tenant agree on the Landlord's Price or Lease Terms specified in
Landlord's Notice, and on such other terms and conditions of purchase and sale
or leasing within twenty (20) days of Landlord's Notice by executing a mutually
agreeable purchase and sale agreement or lease, then Tenant shall post with
Landlord a ten percent (10%) non-refundable deposit and the Offer Property, or
such portion thereof, shall be sold or leased by Landlord to Tenant, in the same
condition as at the time of the posting of the deposit, within ninety (90) days
of the execution of a mutually agreeable purchase and sale agreement or lease at
the Landlord's Price or Lease Terms.
If Tenant thereafter defaults in its obligation to Landlord under this
subsection, Landlord shall retain as liquidated
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damages the Tenant's deposit and all interest earned thereon, which such deposit
shall be Landlord' sole and exclusive remedy at law or in equity for Tenant's
default under this Section 26.5. If Tenant does not exercise its option of
first offer, or if, after using good faith efforts, Landlord and Tenant do not
agree on a purchase price or lease terms or on a mutually agreeable purchase and
sale agreement or lease, then Landlord shall be free for a period of three
hundred sixty-five (365) days thereafter to sell or lease the Offer Property, or
such portion thereof, subject to this Lease to any third party for a price or
lease terms equal to or greater (with respect to price) or more favorable (with
respect to lease terms) than the Landlord's Price or Lease Terms. If Landlord
does not sell or lease the Offer Property within said three hundred sixty-five
(365) day period pursuant to the terms and conditions of the purchase and sale
agreement or lease, Tenant's right under this Section 26.5 shall revive and
continue.
Notwithstanding the aforesaid, Tenant's rights set forth in this Section
26.5 shall not be applicable to transfers and sales to Affiliates (as herein
defined) of Landlord or The Gutierrez Company, transfers or sales to any party
of any limited partnership interest in the limited partnership which is
Landlord, transfers or sales of any general partnership interest in the limited
partnership which is Landlord to an Affiliate, the placing of any bona fide
mortgage on the Building or any
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ground leasehold interest therein or any portion thereof or to the foreclosure
thereof or to the delivery of a deed or any other transfer in lieu of such
foreclosure, or any sale and leaseback transaction, any exercise of an option to
acquire an ownership interest in the Building or the Lot pursuant to any equity
or convertible mortgage, and to any partial sale of an undivided interest or any
joint venture transaction in lieu of conventional mortgage financing so long as
the Landlord, The Gutierrez Company or their Affiliates continue to own at least
twenty percent (20%) beneficial interest in the Building or the Lot, provided,
however, that Landlord shall give notice to Tenant (i) ten days before the grant
by Landlord of any deed in lieu of such foreclosure, and (ii) forthwith of the
institution of any foreclosure under any mortgage of the Building or the Lot.
Any such transfer or sale shall be subject to the terms and provisions of this
Lease.
As used herein, the term "Affiliate" shall mean as to any Landlord (i)
Arturo J. Gutierrez, John A. Cataldo, and other employees of The Gutierrez
Company, or members of their immediate family (as defined below); (ii) the legal
representative, successor or assignee of, or any trustee of a trust for the
benefit of Arturo J. Gutierrez, John A. Cataldo, and other employees of The
Gutierrez Company or members of their immediate family; or (iii) any entity of
which a majority of the voting interests is owned by any one or more of the
persons
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referred to in the preceding clauses (i) and (ii). Immediate family shall mean,
with respect to any person, his spouse, children, adopted children, parents,
parents-in-law, and grandchildren.
26.6. GOVERNING LAW. This Lease shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
26.7. NO WAIVER. Failure of either party to complain of any act or
omission on the part of the other party, no matter how long the same may
continue, shall not be deemed to be a waiver of any rights hereunder. No waiver
by either party at any time, express or implied, or any breach of any provisions
of this Lease shall be deemed a waiver of a breach of any other provision of
this Lease or a consent to any subsequent breach of the same or any other
provision. If any action of any party shall require the consent or approval of
the other party, the consent to or approval of such action on any one occasion
shall not be deemed a consent to or approval of said action on any subsequent
occasion or a consent to or approval of any other action on the same or any
subsequent occasion, and such consent or approval shall not be unreasonably
withheld or delayed.
26.8. RIGHTS SEPARATE. Any and all rights and remedies which either
party may have under this Lease or by operation of law, either at law or in
equity, upon any breach, shall be distinct, separate and cumulative and shall
not be deemed
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inconsistent with each other; no one of them whether exercised by the other
party or not, shall be deemed to be exclusive of any other, and any two or more
of all of such rights and remedies may be exercised at the same time.
26.9. SINGULAR AND PLURAL. Words and phrases used in the singular
shall be deemed to include the plural and vice versa, and nouns and pronouns
used in any particular gender shall be deemed to include any other gender.
26.10. HEADINGS. The various terms which are defined in Articles of
this Lease or are defined in Exhibits annexed hereto shall have the meanings
specified in such Articles and such Exhibits for the purposes of this Lease and
all agreements supplemental thereto, unless the context clearly indicates the
contrary.
26.11. PARKING. Tenant's occupancy of the Premises shall include the
use of 3.5 parking spaces per 1,000 square feet of floor area, as shown on
Landlord's Plans. There shall be a minimum of four hundred fifty-five (455)
parking spaces for the exclusive parking by Tenant.
26.12. NON-RECOURSE. Tenant agrees to look solely to Landlord's then
equity interest in the Premises and the proceeds thereof at the time owned for
recovery of any judgment from Landlord; it being agreed that neither Landlord
(original or successor), nor any partner (general or limited), associate,
participant, principal (disclosed or undisclosed), agent,
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employee, trustee or other fiduciary, beneficiary, officer, or other person or
entity in or of any partnership, association, joint venture, corporation or
other entity, trust, or estate from time to time owning Landlord's interest in
this Lease, shall ever be personally liable for any such judgment or for the
payment of any monetary obligation to Tenant (it being agreed by Tenant that
such exoneration from personal liability is and shall be absolute and complete
with no exception whatsoever).
With respect to any services to be furnished or obligations to be
performed by Landlord to Tenant, except with respect to the negligence of
Landlord, its employees or agents, Landlord shall never be liable for failure to
furnish or perform the same when prevented from doing so by strike, lockout,
breakdown, accident, order or regulation of or by any governmental authority, or
failure of supply, or inability by the exercise of reasonable diligence to
obtain supplies, parts or employees necessary to furnish such services, or
because of war or other emergency, or for any or other Force Majeure causes
beyond Landlord's reasonable control as defined in Section 9.5 of this Lease, or
for any cause due to any act or omission of Tenant, Tenant's invitees,
customers, servants, agents, employees, licensees or any person claiming by,
through or under Tenant.
26.13. SELF-HELP. If Landlord shall have failed to perform any of
Landlord's covenants hereunder, including without limitation any covenants to
make repairs to or restoration of
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the Premises in accordance with the provisions of Articles IX and XIII, within
the time periods set forth herein, Tenant shall have the right, but not the
obligation, to perform any of such covenants for the account of Landlord after
giving Landlord five (5) days' prior written notice of Tenant's intention so to
do and provided that Landlord has not commenced and diligently pursued the same
within such five (5) day notice period. If Tenant shall undertake such
performance, Landlord shall reimburse Tenant for all costs and expenses
reasonably incurred by Tenant in connection with such performance ("Self-Help
Costs") within twenty (20) days after receipt of an invoice therefor from Tenant
(together with any backup documentation reasonably satisfactory to Landlord). If
Landlord shall fail so to reimburse Tenant for such Self-Help Costs, Tenant
shall have the right to offset the unreimbursed Self-Help Costs against ten
percent (10%) of the monthly Fixed Rent due hereunder until such unreimbursed
Self-Help Costs have been reimbursed in full.
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Lease as of this 26th day of July, 1996.
LANDLORD: MICHELSON FARM-WESTFORD
TECHNOLOGY PARK TRUST
By:
____________________, Class A
Trustee of Michelson Farm-Westford
Technology Park Trust, on behalf of
himself and his co-Class A Trustee
in their capacities as said trustees
and not individually
Dated:
By:
____________________, Class B
Trustee of Michelson Farm-Westford
Technology Park Trust, on behalf of
himself and his co-Class B Trustee
in their capacities as said trustees
and not individually
Dated:
TENANT: GENRAD, INC.
By:
Its:__________________________________
Dated:
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TABLE OF CONTENTS
TO THE
LEASE OF BUILDING 8
MICHELSON FARM-WESTFORD TECHNOLOGY PARK
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I TERMS DEFINED........................................... 1
ARTICLE II DESCRIPTION OF PREMISES................................. 4
ARTICLE III TERM.................................................... 6
ARTICLE IV RENT.................................................... 8
ARTICLE V OPERATING AND MAINTENANCE COSTS AND
REAL ESTATE TAXES....................................... 13
ARTICLE VI LANDLORD'S COVENANTS.................................... 25
ARTICLE VII LANDLORD'S WARRANTIES AND REPRESENTATIONS............... 30
ARTICLE VIII USE OF PREMISES......................................... 35
ARTICLE IX PREPARATION OF PREMISES................................. 36
ARTICLE X COMPLIANCE WITH LAW..................................... 61
ARTICLE XI ALTERATIONS, ADDITIONS AND IMPROVEMENTS................. 62
ARTICLE XII TENANT'S COVENANTS...................................... 68
ARTICLE XIII CASUALTY AND CONDEMNATION............................... 76
ARTICLE XIV RIGHTS OF MORTGAGEE..................................... 85
ARTICLE XV INSURANCE............................................... 89
ARTICLE XVI INDEMNIFICATION......................................... 93
ARTICLE XVII ASSIGNMENT AND SUBLETTING............................... 96
ARTICLE XVIII TENANT'S PROPERTY....................................... 100
ARTICLE XIX TENANT'S DEFAULT........................................ 101
ARTICLE XX NOTICES................................................. 104
ARTICLE XXI QUIET ENJOYMENT......................................... 105
ARTICLE XXII HOLDING OVER............................................ 106
ARTICLE XXIII MEMORANDUM OF LEASE..................................... 107
ARTICLE XXIV SURRENDER OF PREMISES................................... 107
ARTICLE XXV ESTOPPEL CERTIFICATES................................... 108
ARTICLE XXVI ADDITIONAL PROVISIONS................................... 108
</TABLE>
<PAGE> 2
MICHELSON FARM-WESTFORD TECHNOLOGY PARK
LEASE
Lease of Building 8
Dated for reference purposes as of: July 26, 1996
ARTICLE I
TERMS DEFINED
1.1. Subjects referred to: Each reference in this Lease to any of the
following terms shall mean:
LANDLORD: Arturo J. Gutierrez and John A. Cataldo, as Class A Trustees, and
John Pike and Thomas E. Leggat, as Class B Trustees, as trustees of Michelson
Farm-Westford Technology Park Trust, u/d/t dated October 1, 1984 and recorded
with the Middlesex North Registry of Deeds in Book 2863, Page 235
MANAGING AGENT: The Gutierrez Company
LANDLORD'S & MANAGING AGENT'S ADDRESS:
c/o The Gutierrez Company
One Wall Street
Burlington, MA 01803
LANDLORD'S REPRESENTATIVE: John A. Cataldo
LANDLORD'S CONSTRUCTION REPRESENTATIVES: Arturo J. Gutierrez,
John A. Cataldo, P. Agustin
Rios or Dennis G. Bailey
TENANT: GenRad, Inc.
TENANT'S ADDRESS (FOR NOTICE AND BILLING):
GenRad, Inc.
300 Baker Avenue
Concord, MA 01742-2174
Attn: Daniel F. Harrington
With a Copy to:
GenRad, Inc.
300 Baker Avenue
Concord, MA 01742-2174
Attn: Walter A. Shephard
<PAGE> 3
TENANT'S REPRESENTATIVES: Daniel F. Harrington or Walter A. Shephard
TENANT'S CONSTRUCTION REPRESENTATIVES: Daniel F. Harrington
or Walter A. Shephard
BUILDING: Building 8 - 100,000 gross square feet - to be constructed on the lot
(the "Lot") as shown on Exhibit "A" in accordance with the Plans and Outline
Specifications attached as Exhibits "B-1" and "B- 2", respectively, and any
replacements thereof and any alterations and additions thereto, including the
Tenant's Work (as hereinafter defined).
SCHEDULED TERM COMMENCEMENT DATE: April 15, 1997
OUTSIDE DELIVERY DATE: Per Section 9.2
TERM EXPIRATION DATE: Fifteen (15)
Years following the Term Commencement Date
as determined in accordance with Section
9.2 of this Lease
FIXED RENT: Years 1-5: $841,000.00/Year; $70,083.33/Month
Years 6-10: $967,150.00/Year; $80,595.83/Month
Years 11-15: $1,112,222.50/Year; $92,685.21/Month
SPECIAL PROVISIONS:
Option to Extend: Section 3.2
Right of First Offer: Section 26.5
ESTIMATED ANNUAL TENANT'S PROPORTIONAL SHARE OF COMMON AREA
MAINTENANCE (YEAR ENDING DECEMBER 31, 1997): $68,000.00/Year
$ 5,666.70/Month
FISCAL YEAR 1997 ESTIMATED
REAL ESTATE TAXES: $60,000.00
PERMITTED USES: General office; light manufacturing
and assembly; laboratory; research and
development.
PREMISES: The Building and the areas which are the subject of all appurtenant
rights and easements set forth or referred to in Sections 2.1 and 26.11 of this
Lease.
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<PAGE> 4
1.2. The exhibits listed below in this Section are incorporated in this
Lease by reference and are to be construed as part of this Lease:
Exhibit "A" Plans showing the Lot and the Office
Park and Plan of Common Easements of the
Office Park
Exhibit "B-1" Preliminary Base Building Plans
Exhibit "B-2" Outline Specifications
Exhibit "C" Intentionally Deleted
Exhibit "D-1" Form of Certificate of Substantial
Completion
Exhibit "D-2" Form of Certificate of Final Completion
Exhibit "E" Intentionally Deleted
Exhibit "F" Rules and Regulations
Exhibit "G" Office Park Covenants
Exhibit "H" Intentionally Deleted
Exhibit "I" Estoppel Certificate
Exhibit "J" Subordination, Non-Disturbance and
Attornment Agreement
Exhibit "K" Budget
Exhibit "L" Form of Work Change Order
Exhibit "M" Definition of Cost of the Work
Exhibit "N" Intentionally Deleted
Exhibit "O" Permitted Encumbrances
Exhibit "P" Landlord's Warranties
Exhibit "Q" Alterations Calculation
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<PAGE> 5
ARTICLE II
DESCRIPTION OF PREMISES
2.1. DEMISE OF PREMISES. In consideration of the rents and covenants
herein stipulated to be paid and performed and upon the terms and conditions
hereinafter specified, Landlord hereby demises and lets to Tenant, and Tenant
hereby leases from Landlord, for the respective terms hereinafter described, the
Premises as described in Article I hereof, which Premises include the
appurtenances described below.
Tenant shall have, as appurtenant to the Building, the right to use in
common with others entitled thereto, subject to reasonable rules and regulations
of general applicability to tenants and owners of other lots in Michelson
Farm-Westford Technology Park (the "Office Park") from time to time made by
Landlord of which Tenant is given notice: all common areas (the "Common Areas")
shown on the Plan of Common Easements of the Office Park attached as part of
Exhibit "A", including, without limitation, all rights to access, use of all
service areas, use of all utility lines including those for electricity, water,
gas and sewage disposal, use of the Office Park sewage treatment plant, use of
all facilities for drainage of surface water runoff, including storm drainage
systems and detention areas, use of all grades, driveways, sidewalks and
footways, lighting systems and traffic flow patterns and, if any, all parking
areas
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designated as common or visitors parking areas for use of the entire Office
Park, including, without limitation, all rights appurtenant to the Lot and the
Building created in the Deed to Landlord.
In addition, the Tenant shall have, as appurtenant to the Building, the
exclusive right and easement with respect to the Lot (i) to use all improvements
thereon including, without limitation, all parking areas, loading areas, service
areas and the like, (ii) to use all means of access to and from the Building to
the Common Areas, including, without limitation, all sidewalks, driveways,
grades, roads and the like (iii) to use all utility lines, electricity, water
and sewage disposal, and (iv) to use all facilities for drainage of surface
water runoff; all of the foregoing rights being subject to reasonable rules and
regulations of general applicability to Tenant and other owners of lots in the
Office Park from time to time made by Landlord of which Tenant is given notice.
Notwithstanding the foregoing provisions, Tenant's rights with respect to (i)
the driveway to be constructed by Landlord along the southerly portion of the
Lot (and all utilities therein) as shown on Exhibit "A" as the "Proposed
Driveway Easement on Lot 6B", and (ii) the easement shown on Exhibit "A" as the
"Emergency Access Easement on Lot 8" shall be non-exclusive.
With respect to the northwesterly, easterly and southeasterly portions
of the Lot which do not contain either
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the Building, parking areas or other paved surfaces, (hereinafter the "Open
Space"), Tenant shall have the right to use the Open Space for recreational
activities, telecommunications equipment and similar purposes, provided that
such activities (a) are permitted as of right under applicable building and
zoning laws and (b) have been approved in advance in writing by Landlord, in its
reasonable discretion, based upon compliance with the Rules and Regulations and
the Office Park Covenants attached hereto as Exhibits "F" and "G", respectively,
and as being consistent with the overall appearance and character of the Office
Park.
ARTICLE III
TERM
3.1. ORIGINAL TERM. The term (the "Term") of this Lease shall commence
on the Term Commencement Date determined in accordance with Section 9.2 of this
Lease and shall expire on the Term Expiration Date, unless same is terminated
pursuant to Articles IX and XIII, or unless extended pursuant to Section 3.2.
3.2. EXTENDED TERMS. The Tenant has the option to extend this Lease
for two (2) successive five (5) year terms ("Extended Terms", and separately the
"First Extended Term" and the "Second Extended Term"), the exercise of each of
which shall automatically extend the term of this Lease without the
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<PAGE> 8
necessity of additional documentation. So long as there does not exist any
Event of Default hereunder at such time, the options to extend shall be deemed
to have been exercised as to the First Extended Term by Tenant's notification to
Landlord that it elects to exercise its first option to extend at least twelve
(12) months but not more than eighteen (18) months prior to the end of the
initial Term hereunder, and as to the Second Extended Term, by Tenant's
notification to Landlord that it elects to exercise its second option to extend
at least twelve (12) months but not more than eighteen (18) months prior to the
end of the First Extended Term.
Each Extended Term shall be upon the same terms and conditions as are
set forth in this Lease, including, without limitation, the Tenant's obligations
to pay real estate taxes, common area maintenance and insurance, except that (i)
there shall be no additional option to extend after the termination of the
Second Extended Term or the failure to exercise the first option, whichever
shall first occur, and (ii) the annual Fixed Rent for the First Extended Term
shall be equal to ninety-five (95%) percent of the then Market Rent (as
hereinafter defined in Section 4.3) and (iii) the annual Fixed Rent for the
Second Extended Term shall be equal to ninety-five (95%) of the then Market Rent
(as hereinafter defined in said Section 4.3). In no event, however, shall (a)
the annual Fixed Rent for the First Extended Term be less than the annual Fixed
Rent set forth
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<PAGE> 9
herein, and (b) the annual Fixed Rent for the Second Extended Term be less than
the annual Fixed Rent for the First Extended Term. Landlord shall, within
fifteen (15) days of receipt of notice of Tenant's election to extend the Term
of this Lease, provide Tenant with notice of Market Rent in accordance with the
provisions of Section 4.3. Landlord and Tenant shall, in accordance with the
provisions of Section 4.3 hereof, establish the Market Rent for the Extended
Terms.
ARTICLE IV
RENT
4.1. FIXED RENT. The Fixed Rent for the Premises during the Term shall
be as set forth in Article I of this Lease and shall be payable on the first day
of each month during the Term hereof in equal monthly installments, also as set
forth in said Article, except that the rent for any portion of a calendar month
during the Term hereof shall be apportioned for such portion. Rental payments
shall be made at the address set forth in Article I of this Lease or at such
other address as Landlord may from time to time designate in writing. All other
payments required by this Lease to be made by Tenant during the Term thereof as
additional rent shall be paid as elsewhere in this Lease set forth. The term
"Annual Rent" shall mean Fixed Rent plus additional rent payable under the
Lease. All rent payable
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<PAGE> 10
by Tenant pursuant to this Lease shall be paid without setoff, adjustment,
deduction or abatement except as expressly set forth in Article XIII, Section
9.2, and in Section 26.13 hereof.
4.2 PAYMENTS. All payments of Annual Rent shall be made to the
Managing Agent set forth in Section 1.1 hereof, or to such other person as
Landlord may from time to time designate. If any installment of Annual Rent is
paid more than five (5) business days after written notice from Landlord that
such rent has not been paid, it shall bear interest at a rate equal to the prime
commercial rate from time to time established by the Fleet National Bank, or
such other major national bank, as Landlord elects, plus four (4%) per annum
from such due date, which such interest shall be immediately due and payable
hereunder as further additional rent.
4.3. MARKET RENT. The market rent for the Premises shall be the then
fair market rent for similarly used space in similar office parks in the Towns
of Westford, Chelmsford and Billerica, which such rent (the "Market Rent") shall
be determined as follows:
(a) The Market Rent shall be proposed by Landlord within thirty (30)
days of receipt of Tenant's notice that it intends to exercise its option to
extend the term as specified in Section 3.2 hereof (the "Landlord's Proposed
Market Rent"). The Landlord's Proposed Market Rent shall be the Market Rent
unless Tenant notifies Landlord, within fifteen (15) business days of Tenant's
receipt of Landlord's Proposed Market Rent, that
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Landlord's Proposed Market Rent is not satisfactory to Tenant ("Tenant's
Rejection Notice").
(b) If the Market Rent is not otherwise agreed upon by Landlord and
Tenant within fifteen (15) business days after Landlord's receipt of Tenant's
Rejection Notice, then the Market Rent shall be determined by the following
appraisal procedure:
1. Landlord and Tenant shall, within five (5) days following the
expiration of said fifteen (15) day period, each designate one (1)
appraiser and shall notify each other of the name and address of the
appraiser whom they have designated. Such two (2) appraisers shall,
within twenty (20) days after the designation of the second appraiser,
make their determinations of the Market Rent in writing and give notice
thereof to each other and to Landlord and Tenant. Such two (2)
appraisers shall have twenty (20) days after the receipt of notice of
each other's determination to confer with each other and to attempt to
reach agreement as to the determination of the Market Rent. If such
appraisers shall concur in such determination, they shall give notice
thereof to Landlord and Tenant and such concurrence shall be final and
binding upon Landlord and Tenant. If such appraisers shall fail to
concur as to such determination within said twenty (20) day period,
they
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shall give notice thereof to Landlord and Tenant and shall immediately
designate a third appraiser. If the two appraisers shall fail to agree
upon the designation of such third appraiser within five (5) days after
said twenty (20) day period, then they or either of them shall give
notice of such failure to agree to Landlord and Tenant and if Landlord
and Tenant fail to agree upon the selection of such third appraiser
within five (5) days after the appraiser(s) appointed by the parties
give notice as aforesaid, then either party on behalf of both may apply
to the Greater Boston Real Estate Board or any successor thereto, or on
his or her failure, refusal or inability to act, to the American
Arbitration Association or to a court of competent jurisdiction, for
the designation of such third appraiser.
2. All appraisers shall be real estate appraisers or consultants who
shall have had at least seven (7) years continuous experience in the
business of appraising real estate in the suburban Boston area.
3. The third appraiser shall conduct such hearings and investigations
as he or she may deem appropriate and shall, within fifteen (15) days
after the date of his or her designation, make an independent
determination of the Market Rent.
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4. If none of the determinations of the appraisers varies from the
mean of the determinations of the other appraisers by more than ten
(10%) percent, the mean of the determinations of the three (3)
appraisers shall be the Market Rent for the Premises. If, on the other
hand, the determination of any single appraiser varies from the mean of
the determinations of the other two (2) appraisers by more than ten
(10%) percent, the mean of the determination of the two (2) appraisers
whose determinations are closest shall be the Market Rent.
5. The determination of the appraisers, as provided above, shall be
conclusive upon the parties and shall have the same force and effect as
a judgment made in a court of competent jurisdiction.
6. Each party shall pay the fees, costs and expenses of the appraiser
selected by it, its own counsel fees, and one-half (1/2) of all other
expenses and fees of any such third appraisal.
Notwithstanding the foregoing Section 4.3, Annual Rent shall never, except as
provided in Articles IX and XIII, be less than that stated in Section 1.1 and
stated in Section 3.2.
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ARTICLE V
OPERATING AND MAINTENANCE COSTS AND REAL ESTATE TAXES
5.1. COMMON AREA MAINTENANCE. Tenant shall pay to Landlord as
additional rent an additional payment on the first day of each month occurring
during the Term hereof one-twelfth (1/12) of the amount of estimated annual
tenant's proportional share of common area maintenance, which such initial
amount for the year ending December 31, 1997 is set forth in Section 1.1
("Tenant's CAM Fund"). The initial payments for 1997 will be based on the
budget attached hereto as Exhibit "K", which may, however, be adjusted as
provided in this Section 5.1 or as a result of actual experience during such
initial or any subsequent calendar years. Such fund is intended to reimburse
Landlord with Tenant's allocable share of certain costs related to the Premises,
the Lot, and the common areas of the Office Park as hereinafter set forth. The
common area maintenance costs included within Tenant's CAM Fund with respect to
the Building, Lot and the exterior areas of the Premises and the Common Areas
shall be categorized in one of the following categories and prorated in
accordance with the prorations set forth within each category:
1. Building Related Expenses, which shall be allocated 100% to Tenant,
shall include the annual charge (i.e. Landlord's cost of the
capital items divided by the
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useful life in years of such capital items) for any capital items
purchased by Landlord for such maintenance, repairs and replacements in
accordance with the provisions of Section 6.1, specifically excluding
any amounts attributable to the Landlord's structural obligations set
forth in said Section 6.1; insurance premiums, if the Landlord
procures, on Tenant's behalf, such insurance specified in Article XV
hereof; routine maintenance and repair of sewer lines exclusively
serving the Lot, utility, fire main and fire hydrant facilities, and
drainage facilities exclusively serving the Building; routine
maintenance of Building entrance sign; routine maintenance, repair and
striping of Tenant's exclusive parking and loading areas, including
snow removal and sanding of driveways and parking lots; fertilization,
mowing and watering of lawn and landscaping and care of shrubbery and
general grounds upkeep; changing of street-lamp lights, walkway lights,
and parking lights, and keeping same in proper condition; and any other
commercially reasonable and customary services, repairs or maintenance
performed solely for the benefit of the Building;
2. Traffic Related Expenses, which shall be allocated on the basis
of the ratio of the number of parking spaces on the Lot to the
aggregate total number of parking
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spaces within the Office Park, shall include snow removal and sanding
of common Office Park drives and parking lots, if any, maintenance and
repair of the Office Park entrance signs, maintenance and repair of
Office Park lighting, traffic signals, and traffic control personnel
required for the Office Park, maintenance and repair of Office Park
walks, and Office Park non-exclusive parking, if any, and any other
traffic or common Office Park roadway or walk-way related expenses;
provided, however, that with respect to the cost of real estate taxes
on those portions of the Common Areas of the Office Park which are
common roadways or driveways, with respect to the costs of snow removal
and sanding and with respect to maintenance of traffic signals and
traffic control personnel, such costs shall be allocated by Landlord on
a reasonable basis taking into consideration the ratio which Tenant's
pro-rata share of parking spaces bears to the total number of parking
spaces in the Office Park, the usage of the common roadways, common
driveways and the necessity of additional snow removal and sanding due
to overtime and weekend use of certain buildings within the Office
Park, and such other pertinent factors as reasonably determined by
Landlord;
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3. Office Park Landscaping/Drainage/Other General Office Park Related
Expenses, which are categorized in Exhibit "K" attached hereto, shall
be allocated on the basis of the ratio of the square footage of the
Building to the aggregate square footage of all completed buildings
including the Building in the Office Park, as such buildings are
completed from time to time, shall consist of the maintenance and
repair of sewer, utilities, and drainage facilities, maintenance and
repair of detention and fire main and fire hydrant facilities which
service the Office Park and are not exclusive to any single building
within the Office Park; fertilization, mowing, and watering of lawns
and landscaping and care of shrubbery and general grounds upkeep of
access drives, entrance areas and other such portions of the Office
Park; and liability insurance costs, other than insurance required to
be maintained by Tenant or Landlord, on behalf of Tenant, on the
Premises and the Lot as specified in Article XV hereof, for the Common
Areas of the Office Park, Landlord and Tenant agreeing that all of the
foregoing Office Park related services being allocated hereunder are to
be commercially reasonable and customary;
4. Sewer Treatment Plant Expenses, including real estate taxes associated
with the land and building or
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buildings of the sewer treatment plant (including any sewer treatment
plant capital expenditures, so long as the same are amortized over the
useful life of the improvements and similarly are reimbursed by other
tenants within the Office Park), shall consist of the expenses of
operating, maintaining and repairing the sewage treatment plant, which
expenses shall be allocated on the basis of the ratio of the square
footage of the Building to the aggregate square footage of all
completed buildings, including the Building, on all lots in the Office
Park, as such buildings are completed and connected for service from
time to time to the sewer treatment plant; provided, however, that such
costs shall be re-allocated by Landlord on a reasonable basis taking
into consideration the usage of large quantities of water by particular
tenants in the Office Park, and such other pertinent factors as
reasonably determined by Landlord.
Notwithstanding anything to the contrary in this Lease contained, Tenant shall
not be required to pay any Common Area Maintenance Costs or to contribute to
Tenant's CAM Fund for:
1. Repairs which are the responsibility of the Landlord, including
structural repairs (i.e., repairs of the structural integrity of the
exterior precast concrete panels of the Building, the foundations and
the roof),
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as well as repairs or other work occasioned by fire or other casualty
or by the exercise of eminent domain or any work required for Landlord
to comply with its construction guarantees or its obligations to have
the Premises in compliance with the law as set forth in Section 10.1;
2. Leasing commissions, attorneys' fees, costs and disbursements and other
expenses incurred in connection with negotiations or disputes with
other tenants, occupants or prospective tenants or occupants of the
Building or Office Park;
3. Interest, principal, ground rent, or other payments under any mortgage,
ground lease or other financing of the Lot, the Office Park or the
sewage treatment plant (including the purchase price if and when
Landlord acquires a fee interest in the land upon which such plant is
located);
4. Any advertising or promotional expenditures;
5. Depreciation or amortization;
6. Services or work provided for other tenants and occupants of the
Building or Office Park and not substantially benefiting Tenant on a
commensurate basis and any expense for which Landlord is entitled to be
reimbursed directly by any such other tenant or tenants;
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7. Overhead or profit increment paid to subsidiaries or affiliates of
Landlord for services on or to the Premises or for the Office Park to
the extent that the costs of such services exceed market rate,
competitive costs of such services were they not so rendered by a
subsidiary or affiliate;
8. Management fees to the Management Agent specified in Section 1.1 hereof
in excess of ten percent (10%) of the annual amount of Tenant's CAM
Fund, which such initial payments are set forth in Exhibit "K" attached
hereto; and
9. Off-site traffic improvements.
Tenant recognizes that Landlord may retain the services of such independent
contractors or affiliates as may be necessary for Landlord to fulfill its
obligations hereunder, and Landlord agrees that all such services will be
obtained by Landlord at commercially reasonable, market rates. Landlord shall
provide to Tenant, within four months of the end of each calendar year, an
annual accounting, in writing, of actual charges. In addition, Landlord shall
maintain complete books and records sufficient to verify these charges. Tenant,
its accountants and agents shall have access to such books and records at
reasonable times with prior written notice.
If Tenant's CAM Fund was not fully spent, Landlord shall, within fifteen
(15) business days after Landlord provides Tenant
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such accounting or, as applicable, after Tenant has provided Landlord with
notice of additional rebate amounts due pursuant to Tenant's audit of such
accounting, rebate to Tenant all unspent funds. If Tenant's CAM Fund was
insufficient to pay such charges, then Tenant shall pay its proportional share
of any deficiency to the Landlord within fifteen (15) business days of billing
by Landlord after the end of each year of the Term. Based on reasonable
estimates of increases in costs covered by this Section, Landlord reserves the
right to adjust Tenant's CAM Fund annually at the time of such accounting
effective on the first day of each calendar year during the Term hereof upon
thirty (30) days prior written notice to Tenant and upon providing Tenant with
documentation supporting such estimates. Any such change shall be effective
retroactively to the first day of the calendar year during which the adjustment
is made. None of such common area maintenance costs shall exceed amounts which
are charged for such expenses in the Westford, Chelmsford and Billerica,
Massachusetts areas for property of the same general type and size as in the
Office Park and shall therefore be at commercially reasonable, market rates.
Notwithstanding anything contained herein, Landlord reserves the right
separately to invoice Tenant for Tenant's proportionate share of any actual
expense for items reasonably beyond Landlord's control contained in the Tenant's
CAM Fund which exceeds the amount for such items by greater than five
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percent (5%). Any such charge shall be effective retroactively to the first day
of the calendar year during which the adjustment was made.
Notwithstanding anything contained herein, Tenant shall have the right to
audit the books and records of Landlord pertaining to the maintenance of the
Premises, the Common Areas, the Lot and the Office Park as herein provided at
any time within three hundred sixty (360) days of receipt by Tenant of the
annual accounting to be delivered to Tenant pursuant to this Section 5.1. Within
seven (7) days after Tenant sends written notice to Landlord advising Landlord
of Tenant's desire to conduct any such audit, Landlord shall provide Tenant and
its representatives with access, during normal business hours, to such
Landlord's books and records at a location where such books and records are
customarily kept by Landlord hereunder. The cost of any such audit shall be
paid by Tenant, provided that, in the event it is determined on the basis of
such audit that the calculation for Tenant's CAM Fund and the charges in
connection therewith were inaccurate, then Landlord shall make any such
necessary adjustments as mentioned above, and if the results of the audit reveal
a greater than ten percent (10%) discrepancy from said annual accounting
furnished by Landlord, then Landlord shall pay, or reimburse Tenant, for the
cost of such audit.
5.2. TAX EXPENSE. Tenant shall pay directly to the relevant taxing
authority (or to Landlord if required by
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Landlord's mortgagee) real estate taxes assessed during the Term hereof (on a
pro rata basis at the beginning or end of the Term) attributable to the Tenant's
Lot and the Building and any assessment, levy, penalty, imposition or tax
(including any tax which may replace or be assessed in lieu of any of the
foregoing), and any interest due thereon, imposed by any authority and agency
having the direct power to tax against the Tenant's Lot and the Building (the
"Tax Expense"). The term "real estate taxes" means the real estate taxes,
betterment assessments, water and sewer use rents, rates or charges, and such
other governmental charges and impositions which are or may be charged, levied,
assessed, imposed or become due and payable with respect to the Lot, Building,
and other improvements comprising the Premises. Landlord agrees that Tax
Expense shall include annually only Tenant's annual share of the cost of any
betterment, based on the useful life of such betterment. All such payments
shall be made prior to the date when interest or penalty would accrue for
non-payment or five (5) business days after Landlord provides Tenant with the
real estate tax bill, whichever is later. Tenant shall furnish to Landlord
copies of such bills and receipts evidencing payment for Landlord's records.
Notwithstanding the foregoing, Tenant shall have no responsibility for late
payment penalty or interest if Tenant's payment was timely made as above
provided.
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Tenant shall also pay all personal property taxes for Tenant's personal
property on the Premises or used in connection therewith. To the extent validly
imposed upon owners of real estate generally and only to the extent permitted by
law and to assure that the rentals hereunder are net to Landlord, Tenant shall
pay, when due, taxes levied or assessed against Landlord by reason of this Lease
on the rental or any other payment required to be made hereunder whether said
taxes are assessed solely on the rental payment hereunder or jointly with other
rentals collected pursuant to any law or ordinance now existing or hereafter
enacted (other than taxes levied on the net income of Landlord derived herefrom
as part of a state or federal income tax law applicable to Landlord's income,
and any income, franchise, gross receipts, corporation, capital levy, excess
profits, revenue, rent, inheritance, devolution, gift, estate, payroll or stamp
tax by whatsoever authority imposed or howsoever designated or any tax upon the
sale, transfer and/or assignment of Landlord's title or estate which at any time
may be assessed against or become a lien upon all or any part of the Premises or
this leasehold), subject to receipt of bills or other documentation evidencing
imposition and assessment of such taxes.
5.3. TAX ABATEMENT. Tenant shall have the right to contest in good
faith by appropriate proceedings diligently pursued the imposition or amount of
any real estate taxes assessed against
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the Lot or the Building or such personal property taxes payable by it hereunder,
including the right on behalf of, and in the name of the Landlord, to seek
abatements thereto. The Landlord shall reasonably cooperate with Tenant, at
Tenant's sole expense, in any such contest or abatement proceedings. In the
event that Tenant determines not to contest such taxes and Landlord desires to
file such contest, Landlord shall give written notice of that fact to Tenant and
shall have the sole right as to such tax bill to contest in good faith by
appropriate proceedings diligently pursued the imposition or amount of any real
estate taxes assessed against the Lot or the Building or such other taxes
payable by Tenant hereunder, including the right to seek abatements thereto. In
such event, the Tenant shall reasonably cooperate with Landlord, at Landlord's
sole expense, in any such contest or abatement proceedings. Any tax abatement
or rebate received shall be allocated to the parties in the same proportion as
payment.
If Landlord shall receive on behalf of the Lot or the Building a rebate or
abatement on any tax paid by Tenant, then after deducting therefrom any costs
reasonably incurred by Landlord in obtaining such rebate or abatement, all of
such net rebate or abatement relating to the Lot or the Building or to personal
property taxes assessed against the Tenant's personal property shall be returned
to Tenant to the extent that such rebate or abatement relates to payment made by
the Tenant and
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not reimbursed by Landlord. If Tenant shall receive on behalf of the Lot or the
Building a rebate or abatement on any tax paid by Tenant, then after deducting
therefrom any costs reasonably incurred by Tenant in obtaining such rebate or
abatement, all of such net rebate or abatement related to the Lot, the Building
or to personal property taxes assessed against the Tenant's property shall be
retained by Tenant, as its sole property, to the extent such rebate or abatement
relates to a payment made by Tenant and not reimbursed by Landlord. The
remaining portion of such net rebate or abatement shall promptly be returned to
Landlord.
5.4 UTILITIES. Tenant shall be solely responsible for paying all
utilities, including, but not limited to, sewer, electricity, water, telephone
and gas consumed in the Building or on the Lot as the same from time to time
become due, and such bills shall be placed in Tenant's name and billed directly
by the utility to Tenant. Landlord reserves the right to pay such utility bills
if unpaid by Tenant following at least ten (10) days prior written notice from
Landlord, and to recover payment from Tenant with any interest and/or penalties
chargeable thereon as additional rent.
ARTICLE VI
LANDLORD'S COVENANTS
6.1 LANDLORD'S COVENANTS DURING THE TERM. Landlord agrees to cure any
defects due to improper installation or working
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order of utilities, or to defects in workmanship, materials or equipment in the
Building and other improvements constructed or to be constructed in or on the
Premises by Landlord, provided Tenant shall have given written notice of such
defects to Landlord prior to the first anniversary of the date of Substantial
Completion of the Building as defined in Article IX hereof, and, as to work
other than the Building, within one (1) year from the Term Commencement Date.
Additionally, Landlord shall use its best efforts to obtain assignable
warranties of longer than one year duration from other contractors and
subcontractors with regard to the Building. Any and all costs of obtaining
extended warranties for Tenant's benefit shall be borne by Tenant, other than
those standard roof warranties being assigned by Landlord to Tenant in the form
of Exhibit "P" attached hereto (appropriately modified to describe the
Premises), the cost for which Landlord shall be solely responsible. In
addition, Landlord shall use reasonable efforts to obtain enforcement of
non-assigned warranties for Tenant's benefit. Landlord shall also furnish to
Tenant copies of all plans, operating manuals and the like within Landlord's
possession and/or within Landlord's reasonable control pertaining to the
improvements constructed or to be constructed in or on the Premises by or on
behalf of Landlord. In addition, Landlord shall be responsible during the Term,
at Landlord's expense and not as a cost allocable to Tenant under Section 5.1,
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for the structural integrity of the Building (including the structural integrity
of the roof, the foundations, and the exterior precast concrete panels of the
Building), damage and destruction due to casualty or eminent domain (except as
set forth in Article XIII) or resulting from Tenant's negligence or misuse only
excepted. Landlord shall perform necessary repairs to maintain the structural
integrity of the Building, except that such repairs shall not be required in the
case of (a) normal settling or sagging of the above items within standard
engineering tolerance (provided, however, that Landlord is responsible in all
events if the settling and sagging affects the surface or structural integrity
of the Building or renders the Building unsafe or unfit for normal use); (b)
damage or deterioration resulting from reasonable wear and tear; (c) subject to
Landlord's restoration obligations under Article XIII hereof, damage and
destruction due to casualty or eminent domain; (d) damage or deterioration
resulting from overloading by Tenant which breaches the floor loading provisions
of this Lease; or (e) damage or deterioration resulting from misuse or
negligence of Tenant. Landlord shall also be responsible for (i) all routine
exterior maintenance and repair of the Building (including the non-structural
elements of the roof, the foundations and the exterior precast concrete panels),
(ii) for such repairs as are required by Article XIII hereof, and (iii) for
replacement of all capital items of the Building which need
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replacement during the Term so long as such replacement was not caused by the
negligence or excessive use (other than matters which are the subject of Section
15.3 of this Lease) of such capital items by Tenant. Landlord shall charge
Tenant under the provisions of Article V for all costs of such routine exterior
maintenance, repairs and replacements, except for the Landlord's structural
obligations set forth in this Section 6.1. All other repairs and maintenance
shall, except as specifically otherwise provided herein, be the responsibility
of Tenant.
In the event that Tenant gives notice to Landlord of a condition which
Tenant believes requires Landlord's repairs or a condition which, if left
uncorrected, will necessitate Landlord's repair, then, in accordance with the
terms of this Section 6.1, Landlord shall respond promptly to investigate such
condition, and, if such repairs are Landlord's obligation hereunder, Landlord
shall commence promptly to repair same and to diligently complete said repair.
Tenant agrees during the Term to provide Landlord notice as soon as reasonably
possible of any condition known to Tenant which might require, or if left
uncorrected will necessitate, Landlord's repair pursuant to this Section 6.1.
Tenant shall have the right to require, at reasonable times and with reasonable
notice, a representative of Landlord to inspect the Building for repairs which
may be the responsibility of Landlord.
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6.2 INTERRUPTIONS. Landlord shall not be liable to Tenant for any
compensation or reduction of rent by reason of inconvenience or annoyance or for
loss of business arising from power losses or shortages to the Building or from
the necessity of Landlord's entering the Premises, subject to Section 12.3, for
any of the purposes in this Lease authorized, or for repairing the Premises or
any portion of the Building or improvements or the Lot, except if such
interruption is due solely to Landlord's willful misconduct or gross negligence.
In case Landlord is prevented or delayed from making any repairs, alterations or
improvements, or furnishing any service or performing any other covenant or duty
to be performed on Landlord's part, by reason of any cause beyond Landlord's
reasonable control, Landlord shall not be liable to Tenant therefor, nor, except
as expressly otherwise provided in Articles IX and XIII hereof, shall Tenant be
entitled to any abatement or reduction of rent by reason thereof, nor shall the
same give rise to a claim in Tenant's favor that such failure constitutes actual
or constructive, total or partial, eviction from the Premises. Landlord agrees
to provide Tenant with reasonable advance notice prior to entering the Premises
except in the case of emergency.
Landlord reserves the right to stop any service or utility system when
necessary by reason of accident or emergency or until necessary repairs have
been completed. Except in case of
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emergency repairs, Landlord will give Tenant reasonable advance notice of any
contemplated stoppage and will use reasonable efforts to avoid unnecessary
inconvenience to Tenant by reason thereof.
ARTICLE VII
LANDLORD'S WARRANTIES AND REPRESENTATIONS
Landlord warrants and represents and covenants, and agrees as follows:
(a) Title. The title to the Premises is vested in Landlord, subject to no
defects or encumbrances except as set forth in Exhibit "O" attached hereto and
incorporated herein by this reference, Landlord and Tenant agreeing that items 3
and 11 in said Exhibit "O" shall be discharged and released by the construction
financing for construction of the Building.
(b) Authority. Landlord has the power and authority to enter into this Lease
and perform the obligations of Landlord hereunder. This Lease and all other
documents executed and delivered by Landlord constitute legal, valid, binding
and enforceable obligations of Landlord, and there are no claims or defenses,
personal or otherwise, or offsets whatsoever to the enforceability or validity
of this Lease.
(c) Hazardous Substances. The Premises (including, for the purposes of this
paragraph only, the Lot) is and to the best of Landlord's knowledge, shall, on
the Term Commencement Date, be
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free of the presence of Hazardous Substances in excess of levels permitted under
applicable law; to the best of Landlord's knowledge, there have been no releases
of Hazardous Substances on the Premises; to the best of Landlord's knowledge,
the Premises has not at any time been used for the generation, transportation,
management, handling, treatment, storage, manufacture, emission, disposal or
deposit of any Hazardous Substances or fill or other materials containing
Hazardous Substances in excess of levels permitted under applicable law; and, to
the best of Landlord's knowledge, the Premises is in compliance with all related
environmental laws. "Hazardous Substances" mean any industrial waste, toxic
waste, oil, chemical contaminant or other substance which, as of the date of
this Lease, is designated as hazardous or toxic under any federal, state or
local statute, law, ordinance, by-law, rule, regulation, order or decree now or
at any time hereafter in effect regulating, relating to, or imposing liability
or standards of conduct concerning any hazardous, toxic, dangerous, restricted
or otherwise regulated waste, substance or material, as now or at any time
hereinafter in effect, including but not limited to, any "oil" or "hazardous
material" as defined by the Massachusetts Oil and Hazardous Material Release
Prevention and Response Act of 1983.
Landlord shall, subject to the provisions of Section 12.9 hereof and in
the manner provided in Section 16.2 of this Lease,
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fully indemnify and hold Tenant harmless from any liability, damage, loss, cost
or expense (including, without limitation, reasonable attorney's fees and other
reasonable costs of legal representation) that arise from (i) personal injury or
property damage or (ii) the reasonable cost of remediation, which Tenant shall
actually suffer from Hazardous Substances existing on the Premises (a) prior to
the date hereof, or (b) after the date hereof attributable solely to Landlord's
acts or omissions.
(d) No Violation and Actions. The execution, delivery and performance by
Landlord of its obligations under this Lease will not conflict with or result in
a breach of any law, governmental rule, regulation, judgment, decree or order by
which the Landlord, to the best of its knowledge, is bound, or by any of the
provisions of any contract to which Landlord is a party or by which Landlord is
bound, or by Landlord's partnership agreement or declaration of trust. There is
no action, suit, proceeding or investigation pending, or to Landlord's knowledge
threatened, before any agency, court or other governmental authority which
relates to the Premises, the use thereof, or the Office Park.
(e) Condemnation. There is no condemnation proceeding affecting the Premises
or any portion thereof currently pending nor, to Landlord's knowledge, is any
such proceeding threatened.
(f) Compliance. The Premises complies with or, prior to the Term Commencement
Date, will comply with all applicable governmental requirements in respect to
the use, occupation and
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construction thereof, including but not limited to environmental, zoning,
platting and other land use requirements, and Landlord has received no notice of
and has no knowledge of any violations or investigations relating thereto.
(g) Default, Breach, Access and Utilities. To the best of Landlord's
knowledge, there is no default or breach by Landlord under any covenants,
conditions, restrictions, rights-of-way, or easements which may affect the
Premises or any portion thereof. Gas, electric power, septic and storm sewer and
water facilities, and all other utilities necessary for Tenant's intended use
and operation of the Premises will be available to and servicing the Premises in
quantities satisfactory to service the Premises for Tenant's intended use. To
the best of Landlord's knowledge, no condition exists which would result in the
termination or impairment of access to the Premises or discontinuation of
necessary sewer, water, electric, gas, telephone, or other utilities.
(h) Assessments. No special or general assessments have been levied, or to
Landlord's knowledge are threatened against all or any part of the Premises.
(i) Legally Subdivided Lot. The Lot is a legally subdivided lot.
(j) Buried Tanks. To the best of Landlord's knowledge, there are no
underground storage tanks on the Lot, nor have underground storage tanks been
removed from the Lot.
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(k) Misrepresentation and Adverse Facts. Landlord has made no untrue
statements or representations in connection with this Lease, and all items
transferred, or to be transferred, to Tenant are true and correct copies of what
they purport to be. Said items have not been amended or modified, other than as
also transferred to Tenant, and no items that should have been set forth as
exhibits hereto or transferred to Tenant have not been so set forth or
transferred. Landlord has not failed to state or disclose any material fact in
connection with the transaction contemplated by this Lease. Landlord knows of
no facts, nor has Landlord failed to disclose any fact, which would prevent
Tenant from using and operating the Premises in the manner in which it is
intended to be operated by Tenant for the Permitted Uses.
(l) Absence of Moratorium. To the best of Landlord's knowledge, no
moratorium, statute, order, regulation, ordinance, legislation, judgment, ruling
or decree of any court or governmental agency has been enacted, adopted, issued,
entered or is pending or in effect, that could materially adversely affect the
Premises, Tenant's ability to operate the Premises for the Permitted Uses, or
Landlord's ability to develop and operate the remainder of the Office Park.
(m) Bankruptcy Matters. Neither Landlord nor The Gutierrez Company has made
a general assignment for the benefit of creditors, filed any voluntary petition
in bankruptcy or suffered the filing of an involuntary petition by the
creditors,
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suffered the appointment of a receiver to take possession of substantially all
of its assets, suffered the attachment or other judicial seizure of
substantially all of its assets, admitted its inability to pay its debts as they
come due, or made an offer of settlement, extension or composition to its
creditors generally.
(n) Landlord shall continue to operate and maintain the sewer treatment plant
for the benefit of the Office Park, including without limitation, maintaining
the validity of all required permits and approvals and performing the tenant's
obligations under any ground lease affecting the Office Park sewer treatment
plant.
ARTICLE VIII
USE OF PREMISES
8.1. Use. Tenant may use the Premises for the Permitted Uses specified in
Section 1.1 of this Lease.
8.2. Permits. Since Landlord's general contractor is constructing the
Landlord's Work and the Tenant's Work, Landlord shall, prior to the time Tenant
occupies the Premises for the aforesaid purposes, procure all authorizations and
permits which may be required for the manufacturing use made of the Premises
including, but not limited to, certificates of occupancy. Tenant agrees that it
will aid the Landlord in obtaining such authorizations and permits if its
assistance is required by the issuing authority or authorities.
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ARTICLE IX
PREPARATION OF PREMISES
9.1. INITIAL CONSTRUCTION. Landlord shall fully construct the Premises
in accordance with the Preliminary Base Building Plans (the "PBBP") and the
Outline Specifications attached hereto as Exhibit "B-1" and Exhibit "B-2",
respectively (all such work being hereinafter collectively referred to as the
"Landlord's Work"). In the event of differences between the PBBP's or the
Landlord's Plans (as hereinafter defined) and the Outline Specifications, the
Outline Specifications shall govern and control until the Landlord's Plans (as
hereinafter defined) are prepared. The PBBP includes Engineered Site Plan dated
June 3, 1996 (the "Plan of Building Footprint"), Preliminary Plan and Details of
Entrance Location, Location of Truck Docks, Location of Elevators, Location of
Interior Stairs, Preliminary Plan and Location of Building Core (including
lavatories, mechanical and electrical rooms), Preliminary Exterior Elevations of
the Building, and Plan of Bay Spacing.
Complete sets of final base building plans and construction drawings and
specifications (collectively the "Landlord's Plans") shall be prepared by the
Landlord. A complete set of construction plans and specifications for Tenant's
Work (as hereinafter defined), shall be prepared by Tenant's Architect (which
such Architect has been approved by Landlord and hired by Tenant, at Tenant's
sole cost and expense), subject to final
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approval by Landlord and Tenant (collectively, the "Tenant's Plans"). The
Tenant's Plans shall be furnished to Landlord as herein provided.
Landlord provided to Tenant on June 25, 1996, the PBBP. Tenant hereby
acknowledges that it has commented upon and approved the PBBP on July 26, 1996.
Landlord agrees to use best efforts to deliver the Landlord's Plans to
Tenant on or before July 26, 1996. Landlord also agrees to deliver to Tenant
schematic and design development plans as they are being produced. Upon
receipt, Tenant shall have seven (7) days to comment upon the Landlord's Plans.
Landlord and Tenant shall use reasonable efforts to reach agreement on the
Landlord's Plans as soon thereafter as possible. In reaching such agreement,
Landlord and Tenant shall each approve portions of the Landlord's Plans that are
in acceptable form and shall note their respective objections to the portions
that are unacceptable to each of them so as to enable Landlord to continue
construction and order materials in a timely manner.
In the event that Landlord's Plans conform with the PBBP, but Tenant
does not approve the Landlord's Plans within seven (7) days of receipt thereof
from Landlord, the Outside Delivery Date (as hereinafter defined) shall be
extended for a number of days equal to the number of Tenant Plan Delay Days, as
said term is hereinafter defined. The number of Tenant Plan Delay Days
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are defined as and shall be calculated by determining the actual number of days
as certified by Landlord and its architect that the Term Commencement Date was
delayed by such Tenant's failure to approve the Landlord's Plans within the
required seven (7) days. Landlord agrees to provide Tenant with written notice
of such determination, such notice to include reasonable detail describing the
cause of the delay and the number of Tenant Plan Delay Days as certified by
Landlord and its architect. If Tenant and Tenant's Architect disagree with the
existence or calculation of Tenant Plan Delay Days as determined by Landlord and
its architect, then Tenant shall, within seven (7) days of receipt of Landlord's
notice, notify Landlord of its disagreement, whereupon within seven (7) days
such Landlord's architect and Tenant's Architect shall appoint a third
architect. The number of Tenant Plan Delay Days shall be the actual number of
days determined by averaging the two closest determinations by the three (3)
architects, with the determination of the architect which was not closest to
another architect's determination excluded from such calculation. Landlord and
Tenant shall each bear the cost of their own architect and shall share equally
the cost of the third architect. During such arbitration period, the parties
agree to cooperate with one another so as to proceed with construction in a
timely manner.
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Landlord and Tenant hereby acknowledge and agree (i) that Tenant has
selected Add, Inc. to be Tenant's Architect for preparation of Tenant's Plans,
and the costs of services of such Tenant's Architect shall be borne by Tenant.
Landlord and Tenant hereby further agree that Tenant shall solely be responsible
for coordinating with Tenant's Architect for the timely preparation of Tenant's
Plans in accordance with the terms and provisions of this Section 9.1.
Tenant shall have until the later of (i) sixty (60) days after final
approval of the Landlord's Plans by Tenant or (ii) October 25, 1996 to deliver
to Landlord the Tenant's Plans. Landlord shall have the right to review Tenant's
Plans in order to determine the compatibility of such plans with Landlord's
Plans. Landlord may require (i) modifications in Tenant's Plans, or (ii) if the
construction of the interior of the Premises according to such plans and
specifications will result in a material interference or a material delay with
Landlord's construction of the Premises, an extension of time to substantially
complete the Premises (the length of any such extension to be determined by
Landlord in its reasonable judgment and certified by Landlord and its
architect). Revisions to Tenant's Plans by Tenant shall be made expeditiously
and shall be reviewed promptly by Landlord for approval.
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Should Landlord give Tenant notice that construction in accordance with
such Tenant's Plans (including any modifications thereto) will result in a
material interference or a delay of Landlord's construction of the Premises,
then Landlord and Tenant shall attempt to mutually agree on an acceptable
extension of time to substantially complete the Premises. If Tenant and
Tenant's Architect disagree with Landlord's and Landlord's architect's
calculation of such extension, then Tenant shall, within five (5) days of
receipt of Landlord's calculation, notify Landlord of its disagreement,
whereupon Landlord's architect and Tenant's Architect will then (within five (5)
days of such Tenant's notice of disagreement) appoint a third architect. Such
third architect shall establish within ten (10) days of its appointment the
duration of such extension. The duration of such extension of time to
substantially complete the Premises shall be the average of the two closest
determinations by the three (3) architects, with the determination of the
architect which was not closest to another architect's determination excluded
from such calculation. Landlord and Tenant shall each bear the cost of their own
architect and shall share equally the cost of the third architect. During such
arbitration period, the parties agree to cooperate with one another so as to
proceed with construction in a timely manner. Such extension time, whether
mutually agreed upon by Landlord and Tenant or determined by such architects
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pursuant to the preceding provisions, shall result in "Tenant Plan Delay Days"
as hereinbefore determined. In addition, Landlord will not approve Tenant's
Plans which involve any construction, alterations or additions requiring unusual
expense to readapt the Premises to normal office, manufacturing or electronic
laboratory use on the Term Expiration Date, unless Tenant first gives assurances
acceptable to Landlord that such readaptation will be made prior to such
termination without expense to Landlord.
Landlord shall have fifteen (15) days after receipt of and mutual
agreement on Tenant's Plans to price the cost of Tenant's Work (as hereinafter
defined) in accordance with the last paragraph of Section 9.1.1.
Landlord and Tenant shall cooperate during the above time periods so
that each party makes the other aware of their progress with respect to the
foregoing plans, selections and pricing, as well as timing, availability or cost
constraints of Tenant's selections or specifications and proposed alternates.
Landlord shall cause the Premises to be completed in accordance with
Landlord's Plans and Tenant's Plans, all of such work to be performed by
Landlord's general contractor, Gutierrez Construction Co., Inc. The Tenant may
request changes to Landlord's Work by altering, adding to, or deducting from
Landlord's Work as set forth in the agreed form of Landlord's Plans. A change
in Landlord's Work initiated by the Tenant (or
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in Tenant's Work as such term is defined in Section 9.1.1 hereof) which affects
Landlord's Work may also necessitate an adjustment in the Outside Delivery Date
(as defined in Section 9.2 hereof) and may result in Tenant Alteration Delay
Days (as hereinafter defined). Landlord agrees to provide Tenant with written
notice if any such adjustment in the Outside Delivery Date will be necessary
based upon the change in Landlord's Work or Tenant's Work initiated by Tenant.
In addition, Landlord agrees to provide Tenant, upon Tenant's request, with
sufficient itemization and back-up documentation to facilitate analysis and to
confirm the cost of any such changes in the Landlord's Work or the Tenant's Work
initiated by Tenant. Tenant shall pay any additional amount equal to the actual
cost (as defined in Section 9.1.1 hereof) of any increase in the cost of
Landlord's Work due to such changes, including the costs of any changes from the
Outline Specifications in Exhibit "B-2", less any appropriate credits for any
Landlord's Work deleted (hereinafter referred to as the "Net Additional Cost of
Landlord's Work"). The Net Additional Cost of Landlord's Work shall be due and
payable to Landlord in the manner specified in Section 9.1.1 of this Lease, but
in any event prior to the Term Commencement Date.
Landlord will also disapprove any alterations or additions requested by
Tenant which will unreasonably delay completion of the Premises or the Building
due to materials or equipment
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having long delivery times or which would cause construction sequencing delays
unless Tenant agrees in writing that it will pay Fixed Rent and additional rent
hereunder for a number of days equal to the actual number of days (the "Tenant
Alteration Delay Days") as certified by Landlord and its architect, by which the
Term Commencement Date would be delayed by such alterations or additions, giving
due consideration to Landlord's obligation to use reasonable efforts to
accelerate construction to make up for lost time due to delays. Landlord agrees
to promptly provide Tenant with written notice of such determination, such
notice to include reasonable detail describing the cause of the delay and the
number of Tenant Alteration Delay Days as certified by Landlord and its
architect.
If Tenant and Tenant's Architect disagree with the calculation of Tenant
Alteration Delay Days as hereinabove determined by Landlord and its architect,
then Tenant shall, within seven (7) days of receipt of such Landlord's notice,
notify Landlord of its disagreement, whereupon within seven (7) days of such
Tenant's notice of disagreement, Landlord's architect and Tenant's Architect
shall appoint a third architect. Such third architect shall make a
determination within ten (10) days of its appointment. The number of Tenant
Alteration Delay Days shall be the actual number of days determined by averaging
the two closest determinations by the
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three (3) architects, with the determination of the architect which was not
closest to another architect's determination excluded from such calculation.
Landlord and Tenant shall each bear the cost of their own architect and shall
share equally the cost of the third architect. During such arbitration period,
the parties agree to cooperate with one another so as to proceed with
construction in a timely manner.
All tenant improvements, changes and additions (except for Tenant's
business fixtures, equipment and personal property, including without
limitation, demountable partitions, manufacturing equipment and telephone or
computer systems) shall be part of the Premises (and shall remain therein at the
end of the Term), and, except such other items as the Landlord, Landlord's
mortgagee and Tenant agree in writing prior to the installation thereof either
(a) shall be removed by Tenant on termination of this Lease, or (b) shall be
removed or left at Tenant's election.
9.1.1. TENANT'S WORK. So long as Landlord has approved Tenant's Plans
in writing, as hereinabove set forth, Landlord and Tenant agree that Landlord's
general contractor will construct the tenant improvements set forth on the
Tenant's Plans (hereinafter "Tenant's Work") with respect to the Premises at
cost (as hereinafter defined) plus a fee for overhead and supervision of seven
percent (7%) of such cost, plus a general contractor's fee of six percent (6%)
of such aggregate cost (i.e. cost plus overhead and supervision).
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For purposes hereof, the cost of the Net Additional Cost of Landlord's
Work and the Tenant's Work performed by Landlord's contractor shall be the
actual net additional cost of any of such work performed by Landlord, or
Landlord's contractor, as specified in the Landlord's Plans, or the Tenant's
Plans, as applicable, as modified by approved change orders approved in
accordance with the provisions of the form of change order attached as Exhibit
"L" hereto. Landlord and Tenant further agree that the certification of cost by
Gutierrez Construction Co., Inc. shall be based on the definition of cost, as
more particularly set forth in Exhibit "M" hereto. Any changes to the Tenant's
Plans after the approval of the Tenant's Plans (and any changes to Landlord's
Plans after the approval thereof as set forth in Section 9.1 above) shall be in
accordance with the form of Work Change Order attached hereto as Exhibit "L".
Landlord shall provide Tenant with construction cost estimates based on Tenant's
Plans, including a breakdown thereof, the name of the subcontractor, if
available, and the work and/or materials to be provided. Unless otherwise
mutually agreed upon by Landlord and Tenant, in the pricing of the cost of
Tenant's Work (specifically excluding Landlord's Work hereunder), Landlord
agrees to obtain three (3) bids from qualified subcontractors selected from a
master list of subcontractors mutually prepared by Landlord and Tenant prior to
the soliciting of bids for Tenant's Work, but only to the extent that the same
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exceeds ten thousand dollars ($10,000.00) giving due consideration to factors
such as price, delivery commitments, and to Landlord's construction experience,
Landlord shall have the right to select which such subcontractor shall be
awarded the Tenant's Work. Upon Tenant's request, Landlord hereby further
agrees to furnish Tenant with copies of such subcontractor bids used by Landlord
in connection with the pricing of Tenant's Work. In addition, in the event that
Landlord and Tenant are unable to agree on the cost of any portion of said work,
Landlord's Representative and Tenant's Representatives for construction matters
shall, within ten (10) days of their inability to agree on a price, select a
third party familiar with building construction who shall establish within ten
(10) days of his selection the cost of the portions of the work in dispute
determined as set forth above. Said third party, including the construction
lender's independent construction consultant, shall be mutually chosen by
Landlord and Tenant. The cost determined by said third party shall be final and
binding on Landlord and Tenant, and Landlord and Tenant shall share equally the
cost of such third party.
In order to provide for payment by Tenant of the cost of Tenant's Work
and any change orders provided for hereunder, including but not limited to the
Net Additional Cost of Landlord's Work, Tenant agrees to deposit monthly into an
interest-bearing account to be established and maintained by
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Landlord's mortgagee, within five (5) business days of receipt
of each of Landlord's monthly requisitions to its mortgagee
therefor (a copy of which shall also be furnished to Tenant),
the total amount of such requisition for Tenant's Work and/or
change orders performed in the Premises for the preceding month.
Landlord shall separately invoice Tenant for the allocable
portion of the interest costs (i.e., the interest rate charged
to Landlord by Landlord's mortgagee on Landlord's construction
loan) incurred by Landlord in connection with its financing of
the cost of such Tenant's Work and change orders on a monthly
basis during the construction of the Tenant's Work, and Tenant
agrees to pay each such invoice to Landlord within five (5)
business days of receipt thereof. Tenant also agrees to pay the
one-half percent (1/2%) commitment fee incurred by Landlord in
connection with its financing of the cost of such Tenant's Work
and any related change orders within five (5) business days of
receipt of an invoice from Landlord. In addition, Tenant shall,
within five (5) business days of receipt of an invoice therefor,
deposit into the escrow account that portion of the building
permit fee charged by the Town of Westford allocable to the
Tenant's Work. Tenant shall be responsible for payment of
escrow fees, if any, incurred by Tenant in connection with such
escrow account. Any and all interest earned on the escrowed
funds shall be payable to Tenant at such time as the escrow is
released by Landlord's mortgagee. It is acknowledged and agreed
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by Landlord and Tenant that Landlord's mortgagee shall have no right to set off
such escrow account against any of Landlord's obligations with its mortgagee.
The escrow account shall be in the name of Tenant and shall accumulate deposits
as hereinabove set forth until such time as Landlord's mortgagee's inspecting
engineer approves Substantial Completion of Landlord's Work and Tenant's Work,
as such term is more specifically defined in Section 9.2(b) of this Article, and
Landlord's mortgagee has funded the final requisition (including retainage)
relating thereto (except for holdbacks for minor punch list items). At such
time as Landlord has substantially completed Landlord's Work and Tenant's Work,
as defined in said Section 9.2(b) of this Article, Landlord's mortgagee shall be
entitled to apply the principal of such escrow account to reduce Landlord's
construction loan. In the event that this Lease is terminated by Tenant
pursuant to the provisions of Section 9.2, Landlord's mortgagee shall release
all amounts in the escrow account (including interest) to Tenant.
The total estimated cost to complete the Tenant's Work under this Lease
and the tenant's work to be constructed by Landlord in accordance with that
certain lease (the "Building 5 Lease") of even date between Landlord and Tenant
with respect to the building commonly referred to as Building 5 in the Office
Park is four million four hundred thousand dollars ($4,400,000.00) (hereinafter,
the "Total Estimated Cost"). Landlord and Tenant
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hereby acknowledge and agree that, at Tenant's election, Landlord first shall
finance the cost of such Tenant's Work hereunder and the tenant's work under the
Building 5 Lease, including any and all change orders in connection therewith,
up to an amount not to exceed the Total Estimated Cost. The estimated cost to
complete the Tenant's Work hereunder is one million eight hundred thousand
dollars ($1,800,000.00) (hereinafter, the "Original Cost"). To the extent that
the actual cost of the Tenant's Work and change orders, as determined by this
Article, is greater than the Original Cost, Landlord shall provide Tenant with
written notice of such fact together with reasonable supporting information. In
such event, and only after the Total Estimated Cost has been expended by Tenant
in the manner hereinabove set forth and in the Building 5 Lease, Landlord shall
provide Tenant with monthly construction requisitions for the construction of
the portion of the Tenant's Work and change orders in excess of the Original
Cost, and Tenant agrees to pay to Landlord monthly the total amount of any such
monthly requisitions based on a percentage of completion basis.
Landlord and Tenant hereby further acknowledge and agree to enter into a
formal escrow agreement with Landlord's mortgagee to implement the foregoing
arrangements prior to the commencement of the Tenant's Work.
9.1.2. TENANT'S CONSTRUCTION WORK. Tenant agrees that any construction
included in Tenant's Plans which Tenant specifies
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to be done by itself or its contractors (hereinafter referred to as "Tenant's
Construction Work"), which shall include Tenant's installation of its voice and
data lines, conduits and equipment, and Tenant's installation of furnishings and
furniture and later changes or additions, shall be coordinated with any work
being performed by Landlord in such a manner as to maintain harmonious labor
relations and not damage the Premises or Lot or interfere with the operation of
the Building or with any of Landlord's construction work hereunder, including
but not limited to the construction of the Landlord's Work and Tenant's Work.
Tenant (including its contractors, agents or employees) shall have access to the
Premises and may perform Tenant's Construction Work on the Premises prior to the
Scheduled Term Commencement Date and prior to the commencement of the Term so as
to prepare the Premises for occupancy by Tenant, provided that (i) Tenant's
contractors, agents or employees work in a harmonious labor relationship with
Landlord's general contractor, (ii) reasonable prior written notice is given to
Landlord's general contractor specifying the work to be done, (iii) no work
shall be done or fixtures or equipment installed by Tenant in such manner as
unreasonably to interfere with any work being done by or for Landlord on the
Premises, and (iv) Tenant has obtained, at its sole cost and expense, any and
all permits and approvals necessary in connection with such work, if any. During
the period of preoccupancy of the Premises by
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Tenant in connection with Tenant's Construction Work prior to the commencement
of the Term, no Fixed Rent or additional rent shall accrue or be payable, but
otherwise such preoccupancy shall be subject to all the terms, covenants and
conditions contained in this Lease.
9.2. PREPARATION OF PREMISES FOR OCCUPANCY. Landlord is obligated to
perform the construction work set forth in the Landlord's Plans and the Tenant's
Plans, and, therefore, Landlord agrees to have the Premises ready for occupancy
on the Scheduled Term Commencement Date.
Landlord and Tenant agree that time is of the essence, and Landlord
agrees to use reasonable efforts to accelerate construction to make up for time
lost due to any delays.
The Term of this Lease shall commence on the date the Premises are
deemed ready for occupancy as set forth below (the "Term Commencement Date").
The Premises shall be deemed ready for occupancy on the earlier of:
a. the date on which Tenant occupies all of the Premises; or
b. the date on which the construction, as specified in this Section
9.2, to be completed or caused to be completed by Landlord, is substantially
completed, as defined below, as certified by Landlord's architect, and Landlord
has delivered to Tenant copies of all permits and approvals required to be
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obtained from any governmental agency prior to occupancy of the Premises by
Tenant, including, without limitation, a certificate of occupancy from the Town
of Westford or a temporary certificate of occupancy from the Town of Westford
which allows Tenant to use and occupy the Building, and which temporary
certificate of occupancy is not conditional on the performance of any work other
than the Punch List Work as defined below, except that such permit(s) and
approval(s) shall not be required as a condition of Substantial Completion if
Landlord is unable to secure the same due solely to Tenant's failure to complete
Tenant's Construction Work as specified in Section 9.1.2 above (which such date,
subject to additional terms and provisions of this Section 9.2, shall
hereinafter be referred to as the date of "Substantial Completion").
Notwithstanding anything in this Section (b) to the contrary, if Substantial
Completion occurs on any date other than on any one of the first fourteen (14)
days of each calendar quarter (i.e., January, April, July, October) occurring
during construction by Landlord, the Term Commencement Date shall be deemed to
be the first day of the first month of the next succeeding calendar quarter
occurring after Substantial Completion.
If Tenant shall not have commenced to occupy all of the Premises after
they are deemed ready for occupancy as provided in this Section 9.2, an AIA
Certificate of Substantial Completion by the Landlord's architect (which such
Certificate
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shall be in the form attached hereto as Exhibit "D-1") shall evidence the
Landlord's determination that it has performed all such obligations, except for
completing the landscaping work and completing the finish paving course, and
minor items stated in such Certificate to be incomplete or not in conformity
with such requirements, all of which work will not interfere with Tenant's Work
or will not unreasonably interfere with Tenant's use or occupancy of the
Premises and all of which work (collectively such landscaping work, finish
paving course work and minor items are referred to herein as the "Punch List
Work") shall be promptly completed within thirty (30) days after the date of
Substantial Completion, as herein provided. Landlord agrees to furnish to
Tenant said Certificate of Substantial Completion, regardless of whether Tenant
is occupying the Premises (or any portion thereof) or not, upon performance of
all of the obligations set forth above. Tenant shall have the right, within
fifteen (15) days after Tenant's receipt of said Certificate of Substantial
Completion, to notify Landlord of Tenant's and Tenant's Architect's disagreement
with said Certificate, and if the parties are unable to agree on whether or not
said Certificate of Substantial Completion should have issued within ten (10)
days of Tenant's notification to Landlord of Tenant's disagreement with said
Certificate,then the Landlord's architect and Tenant's Architect shall promptly
mutually employ a third architect to be employed at the expense
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of both parties who shall then promptly certify as to the date of Substantial
Completion and such certification shall be binding on the Landlord and Tenant.
If the determination by the third architect differs from the determination of
Substantial Completion made by Landlord's architect, then the parties shall
adjust the Rent payments accordingly. In any event, the Tenant agrees to pay
Rent for the Term commencing as set forth above using the date set forth in the
Certificate of Substantial Completion by Landlord's architect as the operative
date of Substantial Completion, and Rent adjustments, if any, shall be made
subsequently in accordance with the decision of the third architect.
If weather interferes with Landlord's ability to finish the final course
of paving and outside work or such other Punch List Work, which such work does
not substantially interfere with Tenant's occupancy, within thirty (30) days
after the date of Substantial Completion as herein provided, said work can be
completed by Landlord reasonably thereafter, so long as such delay does not and
will not interfere with or prevent Landlord from obtaining a certificate of
occupancy upon completion of all other work herein described.
After Landlord has completed all Landlord's Work and Tenant's Work,
including all Punch List Work, Landlord's architect shall forward to Tenant its
Certificate of Final Completion, such Certificate to be in the form attached
hereto
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as Exhibit "D-2". In addition, upon completion of all such work, including all
Tenant's Construction Work by Tenant, Landlord shall forward to Tenant a final
certificate of occupancy from the Town of Westford.
However, if Landlord is unable to complete its construction by the
Scheduled Term Commencement Date due to (i) a delay in Tenant's delivery of the
Tenant's Plans pursuant to Section 9.1 hereof, or (ii) a delay caused by Tenant
performing the Tenant's Construction Work pursuant to Section 9.1.2 hereof, or
(iii) a delay caused by a change in the Landlord's Plans or Tenant's Plans
initiated by Tenant as reflected in a Work Change Order pursuant to Sections 9.1
and 9.1.1 hereof, or (iv) a delay or stoppage requested in writing by Tenant, or
(v) a delay caused by the existence of Tenant Plan Delay Days and Tenant
Alteration Delay Days pursuant to Section 9.1 hereof (collectively hereinafter
referred to as "Tenant's Delay"), then the Term Commencement Date shall be
deemed to have occurred on the date, as certified by Landlord and its architect,
that the Landlord would have substantially completed the work had there not
occurred such Tenant's Delay, calculated by determining the actual number of
days that the Scheduled Term Commencement Date was delayed by such Tenant's
Delay giving consideration to Landlord's obligation under the second paragraph
of this Section 9.2 to accelerate to make up for time lost due to any delays.
Landlord agrees to promptly provide Tenant with written notice
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of such Tenant's Delay, such notice to include reasonable detail (including back
up documentation if available to Landlord) describing the cause of the delay as
certified by Landlord's architect and the number of Tenant's Delay days as
certified by Landlord and its architect.
If notice of a Tenant's Delay is not given to Tenant within ten (10)
days of its occurrence, then there shall be no Tenant's Delay for such item(s).
Tenant shall have the right within seven (7) days after receipt of said
certification by Landlord and its architect to notify Landlord of its
disagreement with the calculation of Tenant's Delay days. Within seven (7) days
of Tenant's notification to Landlord of Tenant and Tenant's Architect's
disagreement with said calculation, Landlord's architect and Tenant's Architect
shall promptly mutually employ (at the expense of both Landlord and Tenant) a
third architect, who shall promptly certify as to the total number of Tenant's
Delay days. The number of Tenant's Delay days shall be the actual number of days
determined by averaging the two closest determinations by the three (3)
architects, with the determination of the architect which was not closest to
another architect's determination excluded from such calculation.
Notwithstanding the foregoing provisions, if the Premises are not
deemed ready for occupancy on or before the Outside Delivery Date (as defined
below) for whatever reason, Tenant may elect (i) to cancel this Lease at any
time thereafter while the
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Premises are not deemed ready for occupancy by giving notice to Landlord of such
cancellation which shall be effective ten (10) days after such notice, unless
within such ten (10) day period Landlord delivers the Premises ready for
occupancy as defined herein, in which event such notice of cancellation shall be
rendered null and void and of no further force or effect, or (ii) to enforce
Landlord's covenants to construct the Premises in accordance with the terms of
this Lease.
In the event Tenant elects to enforce Landlord's agreement to construct
the Premises in accordance with this Lease, Tenant shall also have the right to
terminate this Lease if Landlord fails to complete the Premises within the
period of time set by any court of competent jurisdiction for such work to be
completed, or within such additional period of time from the date of Landlord's
default as may be mutually agreed to by Landlord and Tenant. The foregoing
rights shall be the Tenant's sole remedy at law or in equity for Landlord's
failure to have the Premises ready for occupancy as required hereunder.
For purposes hereof, the Outside Delivery Date shall be deemed to refer
to that certain date which is sixty (60) days following the Scheduled Term
Commencement Date, as such Outside Delivery Date may be extended for a period
equal to that of (i) any delays due to Force Majeure as defined in Section 9.5
hereof, (ii) the number of days caused by a Tenant's Delay as hereinbefore
determined; provided, however, that there shall be
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no extensions of said date (other than for the matters set forth in clause (ii)
above) for any specific matter set forth in clause (i) above for more than
ninety (90) days, or for any reason or combination of the foregoing for more
than one hundred twenty (120) days in the aggregate.
9.2.1 PARTIAL OCCUPANCY AND RENT COMMENCEMENT. If the entire Premises
are not ready for occupancy on the Scheduled Term Commencement Date, the Tenant
may occupy any portion or portions of the Premises which are ready for occupancy
when, in Landlord's opinion, it can be done without material interference with
remaining work. In such event, Tenant agrees not to materially interfere with
Landlord's construction of the Premises. In the event Tenant takes occupancy of
a portion of the Premises, that portion shall be deemed ready for occupancy as
to said portion on the date of occupancy of such portion and Tenant's obligation
to pay Fixed Rent and additional rent (including, but not limited to, real
estate taxes, electric expenses and payments to Tenant CAM Fund) shall commence
on said date pro rata based on the square footage occupied compared to the total
square footage in the Building.
9.3. GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION. All construction
work required or permitted by this Lease, whether by Landlord or by Tenant (or
by their respective subcontractors), shall be done in a good and workmanlike
manner and in compliance with all applicable laws and all lawful
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ordinances, regulations and orders of any governmental authority and insurers of
the Building. Either party may inspect the work of the other at reasonable times
and may give notice of observed defects. Notice of such defects shall be in
writing and shall be rectified by Landlord or by Tenant, as the case may be,
within thirty (30) days of the original date of the notice. Failure to provide
notice hereunder shall not be the basis for any liability or for injury or
damage caused by such defect or waiver of right to cause any defect to be
corrected.
9.4. REPRESENTATIVES. Each party authorizes the other to rely in
connection with their respective rights and obligations under this Article IX
upon approval and other actions on the party's behalf by Landlord's
Representative in the case of Landlord or Tenant's Representatives for
construction matters in the case of Tenant or by any person designated in
substitution or addition by notice to the party relying.
Landlord hereby acknowledges and agrees that only the following
persons, Daniel F. Harrington or Walter A. Shephard, or any successors to either
of them holding the same title or any other person delegated the authority from
either of them in writing (hereinafter "Tenant's Construction Representatives")
have the authority to act on Tenant's behalf and represent Tenant's interests
with respect to all matters requiring Tenant's action in this Article. No
consent, authorization or other action by Tenant with respect to matters set
forth in this
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Article shall bind Tenant unless in writing and signed by one of the
aforementioned persons. Landlord hereby expressly recognizes and agrees that no
other person claiming to act on behalf of Tenant is authorized to do so. If
Landlord complies with any request or direction presented to it by anyone
claiming to act on behalf of Tenant who does not have the title and position
mentioned above, such compliance shall be at Landlord's sole risk and
responsibility and shall not in any way alter or diminish the obligations and
requirements created and imposed by this Article, and Tenant shall have the
right to enforce compliance with this Article without suffering any waiver or
abrogation of any of its rights hereunder.
Tenant hereby acknowledges and agrees that only the following persons,
Arturo J. Gutierrez, John A. Cataldo, Dennis G. Bailey or P. Agustin Rios or any
successors to either of them holding the same title or any other person
delegated the authority from either of them in writing (hereinafter "Landlord's
Construction Representatives") have the authority to act on Landlord's behalf
and represent Landlord's interests with respect to all matters requiring
Landlord's action in this Article. No consent, authorization or other action by
Landlord with respect to matters set forth in this Article shall bind Landlord
unless in writing and signed by one of the aforementioned persons. Tenant hereby
expressly recognizes and agrees that no other person claiming to act on behalf
of
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Landlord is authorized to do so. If Tenant complies with any request or
direction presented to it by anyone claiming to act on behalf of Landlord who
does not have the title and position mentioned above, such compliance shall be
at Tenant's sole risk and responsibility and shall not in any way alter or
diminish the obligations and requirements created and imposed by this Article,
and Landlord shall have the right to enforce compliance with this Article
without suffering any waiver or abrogation of any of its rights hereunder.
9.5 FORCE MAJEURE. As used in this Article and elsewhere in the Lease,
"Force Majeure" shall mean a time extension equal to that of any delays due to
(i) Acts of God, (ii) changes in government regulations, (iii) casualty, (iv)
strike or other such labor difficulties not reasonably anticipatable, (v)
unusually severe weather conditions, (vi) unusual scarcity of, or inability
despite the exercise of diligence, to obtain supplies, parts or employees to
furnish such services, or (vii) other acts reasonably beyond Landlord's control
and not reasonably anticipatable, but in no event shall the term include
economic or financial difficulties.
ARTICLE X
COMPLIANCE WITH LAW
10.1. LANDLORD COMPLIANCE. Landlord shall comply with and shall from
time to time conform the Premises to all applicable
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laws, including hazardous waste laws and all lawful ordinances, regulations and
orders of any governmental authority (collectively, the "Laws"), except to the
extent Tenant may be so required as hereinafter set forth.
10.2. TENANT COMPLIANCE. Tenant shall comply, at Tenant's sole expense,
with all Laws if such compliance is necessitated by reason of Tenant's actual
use of the Premises, which such use shall in any event be in conformity with the
Permitted Uses as specified in Section 1.1 of this Lease.
10.3. NOTICE. Landlord and Tenant shall each have the right upon giving
notice to the other to contest any obligation imposed upon either pursuant to
the provisions of this Article and provided the enforcement of such requirement
or law is stayed during such contest and such contest will not subject the other
party to criminal penalty or materially interfere with Tenant's use and
occupancy of the Premises or jeopardize the title to the Premises or otherwise
affect the Premises in any adverse way. Each party shall cooperate with the
other in such contest and shall execute any documents reasonably required in the
furtherance of such purpose.
ARTICLE XI
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
11.1. ALTERATIONS. Tenant may, from time to time, at its own cost and
expense and without the consent of Landlord, make
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non-structural alterations, additions or improvements to the Premises
(collectively herein called "Alterations") whose cost in any one instance is
seventy-five thousand dollars ($75,000) dollars or less, provided Tenant first
notifies Landlord in writing of any such Alterations. If Tenant desires to make
any non-structural Alterations costing in excess of seventy-five thousand
dollars ($75,000) in any one instance or any other alteration, Tenant must first
obtain the consent of Landlord thereto, which consent shall not be unreasonably
withheld or delayed. If Landlord reasonably concludes that the Alterations
involve any construction, alterations or additions requiring unusual expense to
readapt the Premises to normal office or electronic laboratory use on the Term
Expiration Date, Landlord shall notify Tenant in writing at the time of approval
that such readaptation will be required to be made by Tenant prior to such Term
Expiration Date without expense to Landlord.
If Tenant desires to make any structural Alterations to the Building
(including to the structural components of the roof, the exterior precast
concrete panels, and/or the foundations), Tenant must first obtain the consent
of Landlord thereto, which consent shall not be unreasonably withheld or
delayed. If Landlord consents to Alterations affecting such structural
components, or portions thereof, Landlord shall be relieved of further
maintenance and repair responsibility for only such
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structural components of the Building that were altered by Tenant, and Tenant
shall assume responsibility for only those structural components of the Building
that were altered by Tenant, except that, notwithstanding the foregoing,
Landlord agrees, upon request of Tenant, to have such Alterations be performed
by Landlord or a contractor hired by Landlord, at Tenant's sole cost and
expense, in which event Landlord shall not be relieved of any responsibility it
may have for such portion of the structure of the Building (including the
structural integrity of the roof, the exterior precast concrete panels and the
foundations) altered by Landlord at Tenant's request.
If Tenant desires to make any alterations to the precast panels, or to
the exterior of the Building, Tenant must first obtain the prior written consent
of Landlord thereto which may be withheld in Landlord's reasonable discretion.
In no event shall the foregoing be deemed to impose or to imply any affirmative
obligation upon Tenant, rather than Landlord, for making repairs to any
structural components of the Building (or to the structural integrity of the
roof, the precast concrete panels, the foundations, or to the exterior of the
Building).
Any and all such Alterations may be done by any contractor chosen by
Tenant provided any such contractor is reputable, bondable by reputable bonding
companies, carries the kind of insurance and in the amounts set forth herein,
and will work in
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harmony with Landlord's contractors and laborers in the Building.
Notwithstanding the foregoing, no such bonding shall be required for
non-structural Alterations.
11.2. LANDLORD PERFORMANCE OF ALTERATIONS. If Landlord or the
Landlord's general contractor performs the work of making Alterations for
Tenant, bids shall be obtained from three (3) independent subcontractors for
each major applicable subcontract discipline (mechanical, electrical, etc.)
having a value in excess of ten thousand dollars ($10,000.00) and Landlord or
Landlord's general contractor shall perform such work at actual cost, plus a fee
for overhead and supervision of seven percent (7%) of such cost, plus a
Landlord's contractor's fee of six percent (6%) of such aggregate cost (i.e.,
cost plus overhead and supervision).
11.3. TENANT PERFORMANCE OF ALTERATIONS. Tenant in making any
Alterations shall cause all work to be done in a good and workmanlike manner
using materials substantially equal to or better than those used in the
construction of the Premises or original Tenant's Work and shall comply with or
cause compliance with all laws and with any direction given by any public
officer pursuant to law. Tenant shall obtain or cause to be obtained and
maintain in effect, as necessary, all building permits, licenses, temporary and
permanent certificates of occupancy and other governmental approvals which may
be required in connection with the making of the Alterations. Landlord shall
cooperate
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with Tenant in the obtaining thereof and shall execute any documents reasonably
required in furtherance of such purpose, provided any such cooperation shall be
without expense and/or liability to Landlord.
11.4. REMOVAL OF ALTERATIONS. At any time during the Term of this
Lease, Tenant may, at its option, remove any Alterations made so long as such
removal does not render the Premises non-functional as an office facility. In
the event of a removal of any Alterations by Tenant, Tenant shall, at its sole
cost, repair any damage to the Premises caused by such removal.
11.5. GENERAL PROVISIONS. At least annually if such Alterations have
occurred during the past calendar year, Tenant shall furnish to Landlord
as-built sepias and, if applicable, operating manuals, or, at Landlord's option
and only if Tenant's computer system is compatible with that of Landlord's,
computer disk specifications compatible with Landlord's computer system of the
work done by Tenant during such past year and copies of all permits issued in
connection therewith.
Tenant shall have its contractor procure and maintain in effect during
the term of such Alterations the following insurance coverages with an insurance
company or companies authorized to do business in the Commonwealth of
Massachusetts:
(a) Worker's Compensation and Occupational Disease Insurance in
accordance with the laws of the Commonwealth of
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Massachusetts, along with a "All States" and "Voluntary Compensation" coverage
endorsement.
(b) Employer's Liability insurance with a limit of not less than
$100,000.00 per person by accident/$100,000.00 per person by disease/$500,000.00
per policy by disease.
(c) Commercial General Liability including Personal Injury and Property
Damage in the amount of a combined single limit of not less than $2,000,000.00
each occurrence. Coverage must include the following:
(i) premises - operations;
(ii) elevators and hoists;
(iii) independent contractor; and
(iv) contractual liability assumed under this
contract.
(d) Comprehensive Auto Liability including Personal Injury and Property
Damage in the amount of a combined single limit of not less than $500,000.00
each occurrence. Coverage must include the following:
(i) owned vehicles;
(ii) leased vehicles;
(iii) hired vehicles; and
(iv) non-owned vehicles.
(e) Owner and Contractor Protective Liability including Personal Injury
and Property Damage in the amount of a combined single limit of not less than
$1,000,000.00 each occurrence.
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ARTICLE XII
TENANT'S COVENANTS
12.1. MAINTENANCE AND REPAIR. Except as provided in Sections 6.1 with
respect to maintenance, repair and other such obligations of Landlord and 13.1
with respect to repair and restoration obligations of Landlord arising out of a
fire or other casualty and except as to reasonable wear and tear, Tenant shall:
keep the Premises and all fixtures, equipment and utility systems thereon and
therein in good repair, operating condition and working order; make all
structural, roof, and precast panel repairs necessitated solely by Tenant's
misuse or negligence; make and perform or cause to be made or performed all
interior maintenance, repairs, and replacements necessary to the foregoing
including, without limitation, by their inclusion, interior repainting,
replacement of glass damaged or broken and of floor and wall coverings worn or
damaged, keeping of all roof drains clear of blockage by snow and other
obstructions or debris, and shall keep all plumbing, lighting, elevator,
heating, ventilating, air conditioning and other utility and mechanical systems
in the Premises properly maintained and operated in good operating condition;
and properly maintain the plumbing, lighting, elevator, heating, ventilating,
air conditioning and other utility and mechanical systems in accordance with
manufacturers warranty and product standards
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with fully licensed contractors and under contracts, each reasonably acceptable
to Landlord, qualified to perform the service.
Landlord and its agents reserve the right to inspect the systems to
insure proper maintenance at all reasonable times and upon reasonable notice to
Tenant, and if, in Landlord's reasonable judgment, such systems have not been
properly and adequately maintained, as herein required, then Tenant shall
promptly remedy such maintenance deficiency upon receipt from Landlord of
notification thereof. All reasonable cost of such inspections and maintenance by
Landlord shall be included in Tenant's CAM Fund. To the extent that Landlord is
provided with any assignable warranties with respect to utility or mechanical
systems in the Premises, Landlord agrees to assign same to Tenant. Landlord
agrees to use reasonable efforts to obtain said assignment. If the warranties
are not assignable, Landlord will cooperate with Tenant on the enforcement of
the warranties for Tenant's benefit. Tenant further covenants to (i) neither
commit nor suffer waste and (ii) at the expiration or termination of this Lease
peaceably to yield up the Premises in such order, repair and condition as Tenant
is required to maintain hereunder, first removing all goods and effects of
Tenant which Tenant is required to remove (including any communications
equipment such as antennas and satellite dishes placed on the roof in connection
with Tenant's operation of its
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business, exterior signs relating to the Premises, and, if requested by
Landlord, Tenant's above ceiling communications, computer and/or electrical
wiring) or which Tenant is permitted to remove and desires to remove and (iii)
to repair all damage caused by such removal leaving the Premises clean and neat
and in a tenantable condition.
12.2. SIGNS. Tenant shall not, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed, and so
long as the Tenant leases at least seventy-five percent (75%) of the Building,
(a) paint or place any signs on the Lot or the Premises or anywhere on the
exterior of the Building, or (b) place any curtains, blinds (other than standard
vertical blinds), shades, awnings, or flagpoles, or the like, in the Premises or
anywhere on or in the Building visible from outside the Premises. Tenant shall
pay the expenses involved in the erection of any sign and of obtaining of
permits therefor. Tenant warrants that it shall obtain all necessary permits and
approvals in compliance with local codes and ordinances prior to erecting any
such sign and, at Landlord's request, Tenant shall remove said sign upon the
termination of this Lease.
12.3. ENTRY AND INSPECTION. Tenant shall permit Landlord and Landlord's
agents and invitees at reasonable times and upon reasonable advance notice,
except in emergency, in which case notice may be given by telephone or in
person, during Tenant's
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regular business hours (i) to examine the Premises; and, if Landlord shall so
elect, to make any repairs or replacements, at Tenant's sole cost and expense,
as Landlord may deem necessary, but only to the extent that Landlord is required
to perform the same, or in the case of Tenant's required performance, only upon
the expiration of Tenant's cure periods hereunder, (ii) to make repairs or
replacements, at Landlord's sole cost and expense, as Landlord may otherwise
deem necessary, and (iii) to show the Premises to prospective purchasers,
prospective or actual mortgagees, and prospective or actual institutional
investors; and, at any time within one (1) year preceding the expiration of the
Term, to show the Premises to prospective tenants, and to affix to any suitable
part of the exterior of the Building and/or the Premises, but not so as to
interfere unreasonably with any of the signs or the windows of the Tenant, a
notice to letting or selling the Premises, and to keep the same so affixed
without hindrance.
12.4. MISCELLANEOUS. Tenant agrees during the Term and so long as
Tenant's occupancy continues:
A. Not to permit its employees and officers to use any parking spaces
other than those described in Exhibit "A" and in Section 26.11 hereof, and to
make every reasonable effort to keep its invitees from using any spaces other
than those appurtenant to the Premises; any governmental charges or surcharges
or other monetary obligations imposed relative to
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parking rights with respect to the Premises shall be considered as a Tax Expense
and shall be payable by Tenant under the provisions of Article V, subject to the
Tenant's right to contest the same at Tenant's expense in good faith and by
appropriate proceedings.
B. Not to injure or deface the Premises, or Lot; and not to permit in
the Premises any public auction, nuisance or the emission from the Premises of
any objectionable noise or odor in violation of law; nor any use thereof which
is contrary to law or ordinances or liable to invalidate or materially increase
the premiums for any insurance on the Building or its contents or liable to
render necessary any alteration or addition to the Premises unless Tenant is
willing to pay for, at its sole cost and expense, and conduct such alteration or
addition, including obtaining any and all necessary permits and approvals in
connection with the construction thereof. If such actions do create any extra
premiums for or increase the rate of any such insurance, then the Tenant shall
pay the increased cost of the same either directly to the insurer or to the
Landlord upon written demand therefor, as the case may be.
12.5. SAFETY APPLIANCES. Tenant agrees to keep the interior of the
Building equipped with all safety appliances required by law or ordinance or any
other regulation of any public authority because of Permitted Uses by Tenant and
to procure all licenses and permits so required because of such
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Permitted Uses and, if requested by Landlord, to do any work so required because
of such Permitted Uses, it being understood that the foregoing provisions shall
not be construed to broaden in any way Tenant's Permitted Uses.
12.6. LOADING. Tenant covenants and agrees not to place a load upon the
Premises exceeding 100 pounds live load per square foot of floor area for above
grade portions of the Premises, and 200 pounds live load per square foot of
floor area for at grade slab portions of the Premises.
12.7. LABOR OR MATERIALMEN'S LIENS. Tenant covenants and agrees not to
cause or permit any liens for labor or materials performed or furnished in
connection therewith to attach to the Premises, or in the event of any such lien
promptly after notice to discharge any such liens which may so attach or to bond
the same. Tenant may contest the foregoing in good faith at Tenant's sole
expense and by appropriate proceedings so long as the Landlord's interest in the
Premises is not jeopardized.
12.8. RULES AND REGULATIONS. Tenant agrees to comply with the Rules and
Regulations set forth in Exhibit "F" and all other reasonable Rules and
Regulations hereafter made by Landlord, of which Tenant has been given notice,
for the care and use of the Premises, the Building, the Common Areas and their
facilities and approaches as further described in the Office Park Covenants
attached hereto as Exhibit "G".
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12.9. HAZARDOUS SUBSTANCES. Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or release of any Hazardous
Substances as defined in Article VII hereof, onto or in the vicinity of the
Premises in excess of levels permitted under applicable law, and will not bring
nor allow to be brought any such Hazardous Substances into the Building, Lot or
Premises, except to use in the ordinary course of Tenant's business. Tenant
agrees to provide Landlord, upon Landlord's request, with an inventory of those
certain Hazardous Substances, if any, used by Tenant in the ordinary course of
Tenant's business. Tenant shall not allow the storage or use of such Hazardous
Substances in any manner not sanctioned by law. If any governmental agency or
any lender shall ever require testing to ascertain whether or not there has been
any release of Hazardous Substances in violation of applicable law, then the
reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand
as additional charges only if (i) such requirement applies to the Premises and
(ii) there is a reasonable basis to assume that any such release is a result of
actions or omissions of actions of Tenant, its employees, its agents, its
invitees and/or its independent contractors, or if such release is determined to
be a result of actions or omissions of actions of Tenant, its employees, its
agents, its invitees and/or its independent contractors. If Tenant receives from
any federal, state or local governmental agency any notice
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of violation or alleged violation of any applicable environmental law, or if
Tenant is obligated to give any notice under any of such applicable law, Tenant
agrees to forward to Landlord a copy of any such notice within three (3)
business days of Tenant's receipt or transmittal thereof. In addition, Tenant
shall execute affidavits, representations and the like from time to time at
Landlord's request concerning Tenant's best knowledge or belief regarding the
presence of Hazardous Substances on the Premises. In all events, Tenant shall
indemnify Landlord in the manner provided in Section 16.1 of this Lease from any
release of Hazardous Substances in, on, or under the Premises or elsewhere in
the Park if caused by Tenant (or its employees, its agents, its invitees and/or
its independent contractors). Landlord retains the right to inspect the Premises
at all reasonable times, upon reasonable notice to Tenant, to ensure compliance
with this paragraph. The provisions of this Section 12.9 are subject to the
terms of Article VII, subsection (c) and shall survive the expiration or earlier
termination of this Lease.
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ARTICLE XIII
CASUALTY AND CONDEMNATION
13.1. CASUALTY. In case during the Term, as it may be extended, all or
any substantial part of the Building (i.e., nine (9) months to rebuild the
Building) is damaged by fire or any other casualty ("Substantial Casualty"),
then this Lease shall, except as hereinafter provided, terminate at Tenant's
election, which may be made by notice given to the other within thirty (30) days
after the casualty, which notice of termination shall specify the effective date
of termination which shall not be less than thirty (30), nor more than sixty
(60) days after the date of notice of such termination. In such event, the Fixed
Rent and additional rent shall be fully abated as of the date of such casualty
in the case of a Substantial Casualty as herein defined, or shall be
proportionately abated as of the date of such casualty in the case of a less
than Substantial Casualty as herein defined.
In the event of any fire or casualty to the Building regardless of the
extent, unless the Lease is so terminated, Landlord shall, as promptly as
practicable, repair, replace and restore the Building to substantially the same
condition as it was prior to the casualty for use and occupation to the extent
of such amounts as may be paid by Tenant as hereinafter provided and proceeds of
insurance, less adjuster's fees and other
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reasonable expenses of collection. However, if such damage is not repaired and
the Building restored to substantially the same condition as it was prior to
such damage within nine (9) months from the date of such damage, plus a
reasonable period of time (not exceeding forty-five (45) days after such fire or
other casualty) to recover the insurance proceeds, Tenant, within thirty (30)
days from the expiration of such nine (9) month period or from the expiration of
any extension thereof pursuant to the terms hereof, may terminate this Lease by
notice to Landlord and Landlord's mortgagee, specifying a date not more than
sixty (60) days after the giving of such notice on which the term of this Lease
shall terminate.
Notwithstanding such termination notice by Tenant, in the event
Landlord repairs such damage and restores the Premises to substantially the same
condition prior to such fire or other casualty, during such period as specified
in Tenant's notice, then such notice of termination given by Tenant to Landlord
hereunder shall be null and void and of no further force or effect.
To the extent that Landlord's architect certifies to Tenant prior to
Landlord's commencement of the repair or reconstruction that the reasonable
period for such repair shall exceed nine (9) months, Tenant's option to
terminate after nine (9) months shall be changed to an option to terminate in
nine (9) months plus the number of months in excess of nine (9) months shown on
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Landlord's architect's certificate plus the extensions hereinbefore described.
The period within which the required repairs may be accomplished shall also be
extended by the number of days lost as a result of "unavoidable delays", which
term shall be defined to include all delays referred to as Force Majeure in
Section 9.5 and as Tenant's Delay days in Section 9.2, but shall exclude the
period of time necessary to recover insurance proceeds.
Notwithstanding the foregoing, if there occurs a Substantial Casualty
to the Building and less than three (3) years then remain in the initial Term,
or in any of the Extended Terms, as the case may be, Landlord may terminate this
Lease by notice to Tenant except that Tenant may render Landlord's notice of
termination nugatory by exercising early its option to extend this Lease in
accordance with Section 3.2 to extend the initial Term or First Extended Term,
as the case may be, of this Lease for five (5) additional years. In the event of
such early exercise, Landlord and Tenant agree to determine the Fixed Rent for
the Extended Terms twelve (12) months prior to the commencement date of the
Extended Terms in the manner set forth in Section 3.2.
Tenant shall, in any fire or other casualty which creates a Landlord
repair obligation in accordance with the terms of this Article, pay to Landlord
prior to Landlord commencing construction of such repair the then applicable
insurance
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deductible plus any costs, as reasonably estimated by Landlord's architect, in
excess of the net proceeds to complete such repair, as a result of Tenant's
failure to adequately insure the Building (including the Tenant's Work), as the
case may be pursuant to the provisions of Article XV hereof, and/or as a result
of Tenant's election to make changes to the scope of the Landlord's Work and/or
the Tenant's Work from the original Landlord's Work and/or Tenant's Work
installed hereunder. Nothing herein shall be construed to limit Landlord's
obligation or Tenant's obligation, as the case may be, to insure the Building
for the full replacement cost as specified in Article XV hereof.
Landlord and Tenant further agree to cooperate with each other so as to
maximize any and all awards of insurance that may be payable under this Lease.
13.2. ADDITIONAL CASUALTY PROVISIONS.
(a) Landlord shall not be required to repair or replace any of Tenant's
business machinery, equipment, cabinet work, furniture, or personal property and
no damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Premises.
(b) In the event of any termination of this Lease pursuant to this
Article XIII, the Term of this Lease shall expire as of the effective
termination date as fully and completely as if
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such date were the date herein originally scheduled as the Term Expiration Date
and Landlord should assist Tenant to the extent necessary to secure Tenant's
share of any insurance award relative to Tenant's Work hereunder. Tenant shall
have access to the Premises at Tenant's sole risk for a period of thirty (30)
days after the date of termination in order to remove Tenant's personal property
except as prohibited by any applicable governmental agency or official.
In addition, in the event of a termination of this Lease as aforesaid,
Landlord agrees to allocate any such insurance award in the manner expressly
provided for in the award furnished to Landlord or in the policy schedule or, if
such award and/or schedule is not expressly itemized, then Landlord agrees,
during the initial Term, to pay to Tenant after deducting from any insurance
award the amount then due to Landlord's mortgagee(s), (but not in excess of the
outstanding debt), the amount paid by Tenant to Landlord for the Tenant's Work
hereunder multiplied by a fraction, the numerator of which is the remaining
months in the initial Term and the denominator of which is one hundred and
eighty (180). With respect to any Alterations paid for by Tenant exceeding two
hundred fifty thousand dollars ($250,000.00) in any year of the Term less any
replacements to the Tenant's Work due to such Alterations, Landlord agrees to
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pay to Tenant after the aforesaid deductions the amount of such aggregate
Alterations multiplied by the following fraction:
180 - (the number of months that have occurred during the
initial Term or Extended Term, as the case may be,
from substantial completion of the Alterations to the
date of the casualty event)
180
(see Exhibit "Q" attached hereto for an example of this calculation). The
remainder of any such award shall be paid to Landlord, or its mortgagee(s), as
their interests may appear. Notwithstanding any language to the contrary,
Landlord's obligation to pay to Tenant any of such portion of the award
described in this paragraph shall be limited to the extent such proceeds are
actually received by Landlord.
13.3. CONDEMNATION - EMINENT DOMAIN. In the event that the whole or
substantially all of the Building shall be permanently taken or appropriated by
eminent domain or shall be condemned for any public or quasi-public use, then
(and in any such event) this Lease and the Term hereof shall automatically be
terminated as of the date determined as hereinafter set forth.
In the event that more than a material part (greater than twenty-five
percent (25%)) of the floor area of the Building, or any material part of the
means of access thereto or parking ("material" in the case of parking shall mean
the reduction of parking spaces to less than 2.8 parking spaces per 1,000 square
feet of Building), so as to substantially interfere with the use of the Building
shall be so taken, appropriated or condemned for
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a period in excess of one (1) year, then (and in any such event) this Lease and
the term hereof may be terminated at the election of Tenant by a notice in
writing of its election so to terminate which shall be given by Tenant to
Landlord within sixty (60) days following the effective date of such taking,
appropriation or condemnation. Landlord may suspend the effectiveness of such
notice by giving its own notice to Tenant within five (5) days of receipt of
Tenant's notice that Landlord shall either (i) remove the impairment to Tenant's
use of the Building by repairing the Building as soon as practicable or (ii)
provide substitute parking spaces equal to the number taken within reasonable
proximity to the Premises within a reasonable time period, it being agreed that
reasonable time includes weather related delays associated with winter and
spring site work and paving.
This Lease and the term hereof shall terminate upon the giving of any
such notice of termination by Tenant at Tenant's election, at such later date
not later than the date on which Tenant shall be required to vacate any part of
the Premises or shall be deprived of a substantial part of the means of access
thereto as Tenant may specify by notice to Landlord. In the event of any such
termination, this Lease and the term hereof shall expire as of the effective
termination date as fully and completely as if such date were the date herein
originally scheduled as the Term Expiration Date.
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If this Lease is not terminated as above set forth, Landlord shall,
with reasonable diligence and up to the amount of the award, restore the
remainder of the Premises, and the remainder of the means of access, as nearly
as practicably may be to the same condition as obtained prior to such taking,
appropriation or condemnation in which event (i) a just proportion of the Fixed
Rent and additional rent, according to the nature and extent of the taking,
appropriation or condemnation and the resulting permanent injury to the Premises
and the means of access thereto and parking shall be permanently abated, and
(ii) a just proportion of the remainder of the Fixed Rent and additional rent,
according to the nature and extent of the taking, appropriation or condemnation
and the resultant injury sustained by the Premises and the means of access
thereto and parking shall be abated until what remains of the Premises and the
means of access thereto and parking, shall have been restored as fully as may be
for permanent use and occupation by Tenant hereunder. In the event of any taking
of the Premises or any part thereof for temporary use for less than one (1)
year, (i) this Lease shall be and remain unaffected thereby, and (ii) Landlord
shall pay to Tenant any award made for such use, provided that if any taking is
for a period extending beyond the Term of this Lease, such award shall be
apportioned between Landlord and Tenant as of the Term Expiration Date.
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13.4. RESERVATION OF AWARD. Except as hereafter set forth, Landlord
reserves to itself any and all rights to receive awards made for damages to the
Premises, Building or Lot and the leasehold hereby created, or any one or more
of them, accruing by reason of exercise of eminent domain or by reason of
anything lawfully done in pursuance of public or other authority, and Tenant
hereby releases and assigns to Landlord all Tenant's rights to such awards, and
covenants to deliver such further assignments and assurances thereof as Landlord
may from time to time request. It is agreed and understood, however, that
Landlord does not reserve to itself, and Tenant does not assign to Landlord, any
damages payable for (i) moveable trade fixtures or other leasehold improvements
(expressly excluding any Tenant's Work hereunder) installed by Tenant or anybody
claiming under Tenant, at its own expense, or (ii) relocation expenses
recoverable by Tenant from such authority in a separate action.
Notwithstanding the foregoing, Landlord agrees that the award from any
permanent taking shall, during the initial Term, be allocated between Landlord
and Tenant in the manner expressly provided for in the award furnished to
Landlord, or, if such award is not expressly itemized, then in the following
manner: first, to Landlord's mortgagee(s) in an amount not to exceed the
outstanding debt; then, to the Tenant an amount equal to the amounts paid by
Tenant to Landlord for Tenant's Work hereunder multiplied by a fraction, the
numerator of which is the number
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of months remaining in the initial Term and the denominator of which is one
hundred eighty (180); or in the case of Alterations paid for by Tenant exceeding
two hundred fifty thousand dollars ($250,000.00) in any year of the Term less
any replacements to the Tenant's Work due to such Alterations, Landlord agrees
to pay to Tenant after the aforesaid deductions the amount of such aggregate
Alterations multiplied by the following fraction:
180 - (the number of months that have occurred during the
initial Term or Extended Term, as the case may be,
from substantial completion of the Alterations to the
date of the condemnation event)
180
(See Exhibit "Q" for an example of this calculation); to the Landlord that
portion of any remaining award. Notwithstanding any language to the contrary,
Landlord's obligations to pay to Tenant any of such portion of the award
described in this paragraph shall be limited to the extent such proceeds are
actually received by Landlord.
ARTICLE XIV
RIGHTS OF MORTGAGEES
14.1. PRIORITY OF LEASE. This Lease shall be subject and subordinate to
the lien of any mortgage of the Premises (the "Mortgaged Premises"), provided
that a Subordination, Non-Disturbance and Attornment Agreement ("Agreement") is
executed, acknowledged and delivered by such mortgagee to
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Tenant. Said Agreement must be in the form attached hereto as Exhibit "J".
14.2. LIMITATION ON MORTGAGEE'S LIABILITY. Upon entry and taking
possession of the mortgaged premises for any purpose other than foreclosure, the
holder of a mortgage shall have all rights of Landlord and, during the period of
such possession or ownership, the duty to perform all Landlord's obligations
hereunder. Except during such period of possession and from and after
foreclosure or deed in lieu of foreclosure, no such holder shall be liable,
either as mortgagee or as holder of a collateral assignment of this Lease, to
perform, or be liable in damages for failure to perform, any of the obligations
of Landlord, unless and until such holder shall enter and take possession of the
mortgaged premises for the purpose of foreclosing a mortgage. Upon entry for the
purpose of foreclosing a mortgage, such holder shall be liable to perform all of
the obligations of Landlord accruing after said entry, provided that a
discontinuance of any foreclosure proceeding shall terminate the liability of
the holder as Landlord.
14.3. MORTGAGEE'S ELECTION. Notwithstanding any other provision to the
contrary contained in this Lease if, prior to the Substantial Completion of
Landlord's obligations under Article IX, any holder of a mortgage on the
mortgaged premises enters and takes possession thereof for the purpose of
foreclosing the mortgage, such holder may elect, by written
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notice given to Tenant and Landlord at any time within 90 days after such entry
and taking of possession, not to perform Landlord's obligations under Article
IX, and in such event such holder and all persons claiming under it shall be
relieved of all obligations to perform, and all liability for failure to
perform, said Landlord's obligations under Article IX, and Tenant may terminate
this Lease and all its obligations hereunder by written notice to Landlord and
such holder given within 30 days after the day on which such holder shall have
given its notice as aforesaid.
14.4. NO PREPAYMENT OR MODIFICATION, ETC. No Fixed Rent, additional
rent, or any other charge shall be paid more than thirty (30) days prior to the
due dates thereof, and payments made in violation of this provision shall
(except to the extent that such payments are actually received by a mortgagee in
possession or in the process of foreclosing its mortgage) be a nullity as
against such mortgagee, and Tenant shall be liable to such mortgagee for the
amount of such advance payments made from and after a default under the
applicable Mortgage. No agreement to make or accept any surrender, termination
or cancellation of this Lease and no agreement to modify so as to reduce the
rent, change the Term, or otherwise materially change the rights of Landlord
under this Lease, or to relieve Tenant of any obligations or liability under
this Lease, shall be binding on mortgagee unless consented to in writing by
Landlord's
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mortgagees of record of whom Tenant has received notice (which such notice shall
include the address of such mortgagee(s)) from Landlord, if any, which such
consent is not to be unreasonably withheld or delayed.
14.5. NO RELEASE OR TERMINATION. No act or failure to act on the part
of Landlord which would entitle Tenant under the terms of this Lease, or by law,
to be relieved of Tenant's obligations hereunder or to terminate this Lease,
shall result in a release or termination of such obligations or a termination of
this Lease unless (i) Tenant shall have first given written notice of Landlord's
act or failure to act to Landlord's mortgagees of record, if any, which Landlord
shall identify to Tenant, specifying the act or failure to act on the part of
Landlord which could or would give a basis to Tenant's rights and (ii) such
mortgagees, after receipt of such notice, have failed or refused to correct or
cure the condition complained of within a reasonable time thereafter, but
nothing contained in this Section 14.5 shall be deemed to impose any obligation
on any such mortgagee to correct or cure any such condition. "Reasonable time"
as used above means and includes a reasonable time to obtain possession of the
mortgaged premises, if necessary for such cure, and if the mortgagee elects to
do so, and a reasonable time to correct or cure the condition if such condition
is determined to exist; however, such time shall not
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extend beyond sixty (60) days after the expiration of all time periods required
for such cure by Landlord under this Lease.
14.6. CONTINUING OFFER. The covenants and agreements contained in this
Lease with respect to the rights, powers and benefits of a mortgagee
(particularly without limitation thereby, the covenants and agreements contained
in this Article XIV) constitute a continuing offer to any person, corporation or
other entity, which by accepting or requiring an assignment of this Lease or by
entry or foreclosure assumes the obligations herein set forth with respect to
such mortgagee; such mortgagee is hereby constituted a party of this Lease and
an obligee hereunder to the same extent as though its name was written hereon as
such; and such mortgagee shall be entitled to enforce such provisions in its own
name.
ARTICLE XV
INSURANCE
15.1. INSURANCE. Except if Tenant exercises its election as set forth
herein, Landlord shall procure and continue in force during the Term and the
Extended Terms hereof at Tenant's expense under the provisions of Article V,
fire and extended coverage insurance, including vandalism, sprinkler leakage,
and malicious mischief, upon the Building on a full replacement cost basis,
agreed cost value endorsement with agreed values for the
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Building and other tenant improvements and alterations, as determined annually
by the Landlord's insurer. The beginning coverage shall be in the amount as is
required by Landlord and its mortgagee up to the full replacement value, and
such coverage shall not, without the written consent of the Landlord and
Landlord's mortgagee, be reduced below that amount. Such coverage shall also
provide that in the event of a casualty or taking and Landlord's failure to
repair or restore the Building as herein provided, then the full replacement
cost of the Building (and not only the "cash value") shall be payable as a loss
thereunder.
Except as otherwise set forth herein, Landlord shall also procure and
continue in force during the Term and Extended Term hereof at Tenant's expense
under the provisions of Article V, rental interruption insurance for twelve (12)
months.
The policies evidencing such insurance shall provide that loss, if any,
payable thereunder shall be payable to the Landlord and/or the Tenant and/or any
mortgagee of the Premises as their respective interests may appear. A
certificate of insurance evidencing the foregoing shall be delivered to the
Tenant. All such policies shall be placed with responsible companies authorized
to do business in the State wherein the Premises are located. The coverages
required by this Article may be provided by a single "package" policy.
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At any time during the Term of this Lease, including any of the
Extended Terms, Tenant shall have the election (exercisable by giving written
notice thereof to Landlord), to procure, on its own behalf, rather than by
Landlord as herein provided, and continue in force during the Term and Extended
Terms hereof, as the case may be, such insurance as specified in this Section
15.1, and/or in Section 15.2 below, provided that (i) such insurance shall be at
Tenant's sole cost and expense (and not allocated to Tenant in the manner
specified in Article V hereof), (ii) such certificates of insurance evidencing
the foregoing shall be delivered to the Landlord and/or Landlord's mortgagee(s)
and shall name Landlord and its mortgagee(s) as additional named insureds, and
(iii) such insurance shall be in full force and effect prior to the cancellation
of the insurance procured and maintained by Landlord hereunder such that there
shall be no "gaps" in any required coverage hereunder, and (iv) that Tenant
complies with any other reasonable requirements imposed by Landlord's
mortgagee(s) upon notification by Landlord; provided, however, that in the event
that Tenant is unable to procure and continue any of such required insurance
during the Term of this Lease or any Extended Term hereunder, then Tenant shall
notify Landlord of same, whereupon Landlord shall procure and maintain such
insurance on Tenant's behalf and at Tenant's cost and expense pursuant to the
provisions of Article V hereof. Upon receipt of a copy of notice of
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cancellation of any insurance which is or may be the responsibility of the
Tenant hereunder, the Landlord may pay the premiums necessary to reinstate the
same. Payment of premiums by the Landlord shall not be deemed a waiver or
release by the Tenant of the default by the Tenant in failing to pay the same or
of any action which the Landlord may take hereunder as a result of such default.
The Tenant shall not violate and shall diligently attempt to prevent its agents,
servants, and employees from violating any of the terms, conditions and
provisions of such policies.
15.2. TENANT LIABILITY INSURANCE. Except as otherwise set forth in
Section 15.1 above (i.e., Tenant elects to procure and maintain such insurance
on its own behalf), the Landlord shall maintain, on behalf of Tenant and at
Tenant's expense under the provisions of Article V, Commercial General Liability
Insurance, including contractual liability endorsement, with respect to the
Premises throughout the Term with combined single limit coverage of Two Million
Dollars ($2,000,000.00). In the event that the Tenant elects to procure and
maintain such insurance as hereinabove set forth, rather than Landlord, then
Tenant shall deliver to the Landlord within thirty (30) days of Landlord's
request a certificate evidencing the aforesaid coverage issued by insurance
companies authorized to do business in the State wherein the Premises are
located, providing that the insurance indicated therein shall not be cancelled
without at least thirty
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(30) days prior written notice to Landlord, and naming Landlord and its
mortgagee as additional named insureds.
15.3. WAIVER OF SUBROGATION. The Landlord and Tenant hereby waive all
causes and rights of recovery against each other, their agents, officers and
employees for any loss occurring to the real or personal property of Landlord or
Tenant, regardless of cause or origin. Landlord and Tenant agree that any
policies presently existing or obtained on or after the date hereof (including
renewals of present policies) shall include 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 insured to recover thereunder. The parties further
agree that if said waiver of subrogation shall become unobtainable or
unenforceable or shall void the respective policies, then their respective
insurance policies shall not be invalidated, and said waiver shall become null
and void and of no further force and effect.
ARTICLE XVI
INDEMNIFICATION
16.1. TENANT'S INDEMNIFICATION. In addition to the provisions of
Section 12.9, the Tenant shall, upon timely receipt of notice, defend and save
the Landlord harmless from and against any and all suits, claims, and demands
arising out
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of injury or damage occurring at the Premises or Lot or Office Park because of
the negligence or willful acts of Tenant, its agents, servants, or employees
including any construction activity undertaken by Tenant pursuant to the terms
of this Lease. In no event is Tenant obligated to defend or save harmless
Landlord from any loss, injury, or damage, or part thereof, not attributable to
Tenant's negligence or willful act or those of its agents, servants, or
employees.
In the event the Landlord is notified of a claim, action or proceeding,
or becomes aware of an occurrence, which may result in indemnification by Tenant
as provided above, the Landlord shall give prompt written notice to Tenant and
provide complete particulars known by the Landlord. The Landlord shall
immediately forward to the Tenant every demand, notice, summons or other process
received by Landlord or his representatives.
Tenant has the exclusive right and obligation to defend any claim,
action, or proceeding wherein Landlord is entitled to indemnification under the
provisions of this Article, and Tenant may settle any such claim, action, or
proceeding without Landlord's consent or approval.
The Landlord will fully cooperate with the Tenant in the defense or
settlement of any claim, action, or proceeding.
16.2. LANDLORD'S INDEMNIFICATION. In addition to the provisions of
Article VII, subsection (c) of this Lease, the Landlord shall, upon timely
receipt of notice, defend and save
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the Tenant harmless from and against any and all suits, claims, and demands
arising out of injury or damage occurring at the Premises or Lot or Office Park
because of the negligence or willful acts of Landlord, its agents, servants, or
employees. In no event is Landlord obligated to defend or save harmless Tenant
from any loss, injury, or damage, or part thereof, not attributable to
Landlord's negligence or willful act or those of its agents, servants, or
employees, except as otherwise set forth in said Article VII, subsection (c)
hereof.
In the event the Tenant is notified of a claim, action or proceeding,
or becomes aware of an occurrence, which may result in indemnification by
Landlord as provided above, the Tenant shall give prompt written notice to
Landlord and provide complete particulars known by the Tenant. The Tenant shall
immediately forward to the Landlord every demand, notice, summons or other
process received by Tenant or his representatives.
Landlord has the exclusive right and obligation to defend any claim,
action, or proceeding wherein Tenant is entitled to indemnification under the
provisions of this Article, and Landlord may settle any such claim, action, or
proceeding without Tenant's consent or approval.
The Tenant will fully cooperate with the Landlord in the defense or
settlement of any claim, action, or proceeding.
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ARTICLE XVII
ASSIGNMENT AND SUBLETTING
17.1. TENANT SUBLET. Landlord hereby grants to Tenant the right to
assign this Lease or to sublet all or any portion of the Premises throughout the
Term, as it may be extended, provided Tenant first obtains Landlord's consent to
such assignment or subletting in writing. Landlord's consent shall not be
unreasonably withheld or delayed. However, Landlord may withhold consent if in
Landlord's reasonable judgment such subtenant's or assignee's proposed use is
not compatible with a first class suburban office park (i.e. a use made in the
Premises which is improper, noisy or offensive or is contrary to any law or any
municipal by-law or ordinance), notwithstanding that the proposed use by such
subtenant or assignee, as the case may be, may be in conformance with the
Permitted Uses. Landlord's consent or refusal of consent shall be in writing
and, if Landlord refuses consent, the reasons for such refusal are to be stated
with particularity. Landlord's consent to an assignment or subletting shall be
accompanied by a statement addressed to Tenant and the assignee or subtenant,
upon which statement Tenant and the assignee or subtenant may conclusively rely,
stating that Tenant is not in default under the Lease (or setting forth what
respects Tenant is in default), that this Lease has not been amended or modified
(or setting forth such
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amendments or modifications), the expiration date of this Lease, and the date to
which rent has been paid to Landlord hereunder. As additional rent, Tenant shall
reimburse Landlord promptly for reasonable legal and other expenses incurred by
Landlord in connection with any request by Tenant for consent to assignment or
subletting. No assignment or subletting shall affect the continuing primary
liability of Tenant (which, following assignment, shall be joint and several
with the assignee).
17.2. LANDLORD'S RESPONSE. In the event Landlord does not respond to
the written request for such consent within fifteen (15) days of the date of
such request from Tenant, Landlord's consent is hereby deemed given.
17.3. SUBSIDIARY ASSIGNMENT. Notwithstanding anything to the contrary
herein contained, Tenant may assign or sublet all or any portion(s) of the
Premises at any time to a subsidiary of Tenant, to the entity with which or into
which Tenant may merge, to any entity with which Tenant is affiliated, or to a
successor to all or substantially all the assets of Tenant or a division of
Tenant or a joint venture in which Tenant owns at least fifty percent (50%)
without the need for Landlord's consent to such assignment or subletting, so
long as Tenant remains primarily liable, and without any obligation of Tenant to
share Rent Differential as set forth in Section 17.4.
17.4. SUBLEASE AND ASSIGNMENT RENT DIFFERENTIAL. If Landlord consents
to sublease or assignment, and said sublease
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or assignment is for a greater rent than the Fixed Rent or additional rent due
from Tenant to Landlord under this Lease, Tenant shall pay to Landlord on a
monthly basis during the term of any approved sublease or assignment as
additional rent hereunder, in addition to the Fixed Rent and other payments due
under this Lease, an amount equal to fifty percent (50%) of the difference
between all fixed rent and additional rent due under the sublease or assignment
and the Fixed Rent and additional rent and other payments due under this Lease,
after Tenant has recouped its out-of-pocket expenses with respect to such
sublease or assignment including without limitation, reasonable real estate
brokerage commissions, reasonable legal fees and the reasonable costs of
refurbishment of the Premises for such sublease or assignment (the "Rent
Differential"). In case any Fixed Rent or additional rent is prepaid to Tenant
under the sublease or assignment, only so much as exceeds the net present value
of Tenant's obligations to pay Fixed Rent and additional rent (reasonably
estimated) for the balance of the Term for the portion of the Premises subject
to such sublease or assignment shall be taken into account in computing the Rent
Differential or the amounts due any foreclosing mortgagee or other successor
landlord under the next succeeding sentence. In the event that a tax exempt
entity becomes a mortgagee in possession or a landlord under this Lease through
foreclosure or deed in lieu of foreclosure by reason of a default under the
applicable mortgage
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or through a participating mortgage transaction or otherwise, and such successor
landlord approves a sublease or assignment which provides for a greater rent
than the Fixed Rent and additional rent due hereunder, Tenant shall pay to such
successor landlord on a monthly basis during the term of any approved sublease
or assignment as additional rent hereunder, in addition to the Fixed Rent and
other payments due under this Lease, an amount equal to fifty percent (50%) of
the difference between all fixed rent and additional rent due under the sublease
or assignment and the Fixed Rent and other payments due under this Lease. In
calculating the amount due in the immediately preceding sentence, there shall be
no credit given to Tenant for its out-of-pocket expenses involved in such
assignment or subletting. In the event the sublease is for less than the full
Premises hereunder, the above rent adjustment shall be pro rated on a square
foot basis. Anything contained in the foregoing provisions of this Section to
the contrary notwithstanding, neither Tenant nor any other person having
interest in the possession, use, occupancy, or utilization of the Premises shall
enter into any lease, sublease, license, concession, or other agreement for use,
occupancy, or utilization of space in the Premises which provides for rental or
other payment for such use, occupancy, or utilization based, in whole or in
part, on the net income or profits derived by any person from the Premises
leased, used, occupied, or utilized
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(other than an amount based on a fixed percentage or percentages of receipts or
sales), and any such purported lease, sublease, license, concession, or other
agreement shall be absolutely void and ineffective as a conveyance of any right
or interest in the possession, use, occupancy, or utilization of any part in the
Premises.
ARTICLE XVIII
TENANT'S PROPERTY
18.1. TENANT'S PERSONAL PROPERTY. Tenant's trade fixtures and personal
property, (collectively called "Tenant's Property"), however installed or
located on the Premises, shall be and remain the property of the Tenant and may
be removed in accordance with the provisions of Article IX. Tenant shall repair
any damage caused by such removal or installation, leaving the Premises
tenantable. Tenant's Property shall be at the sole risk and hazard of Tenant,
and if the whole or any part thereof shall be destroyed or damaged by fire,
water or otherwise, or by the leakage or bursting of water pipes, steampipes or
other pipes, by theft or from any other cause, unless caused by the negligence
of Landlord, its employees or agents, no part of said loss or damage is to be
charged to or be borne by Landlord.
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18.2. REMOVAL. Upon the expiration or termination of this Lease, the
Tenant will remove Tenant's Property from the Premises; if within fifteen (15)
days after such expiration or termination, Tenant shall not have removed same it
shall be deemed abandoned by Tenant. Tenant shall pay to Landlord upon demand
the costs and expenses thereafter incurred by Landlord in removing and storing
Tenant's Property and repairing any damage caused to the Premises or to the
Building by the removal of same.
18.3. NO LIEN. In no event (including a default under this Lease) shall
Landlord have any lien or other security interest in any of Tenant's Property
located in the Premises or elsewhere and Landlord hereby expressly waives and
releases any such lien or other security interest however created or arising.
ARTICLE XIX
TENANT'S DEFAULT
19.1. EVENTS OF DEFAULT. Any of the following shall be an Event of
Default under this Lease:
(a) If the Tenant shall default in the payment of rent or other
payments required by this Lease and shall fail to cure said
default within five (5) business days after written notice of
said default from the Landlord; or
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(b) if the Tenant shall default in the performance or observance of
any other agreement or condition on its part to be performed or
observed, and if the Tenant shall fail to cure said default
within thirty (30) days after receipt of written notice of said
default from the Landlord (or if said default shall require
longer than thirty (30) days to cure and the Tenant fails to
commence curing said default within thirty (30) days after
receipt of written notice thereof and to prosecute the curing of
the same to completion with due diligence); or
(c) if the Tenant shall file a voluntary petition in bankruptcy or
shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking any arrangement, composition,
liquidation or dissolution under any present or future Federal,
State, or other statute, law or regulation relating to
bankruptcy, insolvency or other relief for debtors, or shall seek
or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of the Tenant or of all or any substantial
part of its properties, or of the Premises, or shall make any
general assignment for the benefit of creditors, or shall admit
in writing its inability to pay its debts generally as they
become due; or
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(d) if a court shall enter an order, judgment or decree approving a
petition filed against the Tenant seeking any arrangement,
composition, liquidation, dissolution or similar relief under the
present or future Federal, State or other statute, law or
regulation relating to bankruptcy, insolvency or other relief for
debtors, and such order, judgment or decree shall remain
unvacated or unstayed for an aggregate of sixty (60) days
(whether or not consecutive).
If any Event of Default has occurred, the Landlord at any time
thereafter may give written notice to the Tenant specifying the occurrence
giving rise to such default and stating that this Lease and the Term hereby
demised shall expire and terminate on the date specified in such notice which
shall be at least ten (10) days after the giving of such notice, and upon the
date specified in such notice, this Lease and the Term, estate and interest
hereby demised shall expire and terminate by limitation and all rights of the
Tenant under this Lease shall cease. In the event that this Lease is terminated
on account of a default of Tenant under any of the provisions contained in this
Article or shall be otherwise terminated for breach of any obligation of Tenant,
Tenant shall pay as an additional and cumulative obligation after such
termination punctually to Landlord all the sums which Tenant covenants in this
Lease to pay and the reasonable costs of performing Tenant's obligations under
this
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Lease in the same manner and to the same extent and at the same time as if this
Lease had not been terminated.
19.2. REPOSSESSION. At any time after any such expiration or
termination of this Lease, the Landlord, without further notice, may enter upon
and reenter the Premises to repossess itself of the Premises, by summary
proceedings, ejectment or otherwise, and may remove the Tenant and all other
persons and any and all property from the Premises as hereinabove provided.
ARTICLE XX
NOTICES
20. NOTICES. All notices, demands, requests and other instruments which
may or are required to be given by either party to the other under this Lease
shall be given in writing. All notices, demands, requests and other instruments
from the Landlord to the Tenant shall be deemed to have been given when mailed
by United States Registered or Certified Mail, postage prepaid, return receipt
requested, by hand delivery, courier service, or overnight delivery service with
a receipt addressed to the Tenant at Tenant's Address set forth in Section 1.1
of this Lease, with a copy to Robert A. Fishman, Esq., Nutter McClennen & Fish,
LLP, One International Place, Boston, MA 02110, and addressed to the Landlord at
Landlord's address set forth in Section 1.1 of this Lease, with a copy to Paul
A.
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Hedstrom, Esq., Hinckley, Allen & Snyder, One Financial Center, Suite 4600,
Boston, MA 02111; except that where any period of time commences under this
Lease with notice, such notice shall be deemed given, and such period shall be
deemed to commence, when postal records indicate delivery was first attempted,
and notices by hand delivery or courier service or overnight delivery service
shall be deemed served when delivered or tendered for delivery if refused.
ARTICLE XXI
QUIET ENJOYMENT
Landlord covenants and agrees with Tenant that upon Tenant paying the
rent and additional rent and observing the terms, covenants and conditions on
Tenant's part to be observed and performed hereunder, Tenant may, at all times
during the Term of this Lease, have the right to peaceably and quietly have,
hold, occupy and enjoy the Premises demised hereby without hindrance or
molestation from Landlord or any person claiming by, from or under Landlord.
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ARTICLE XXII
HOLDING OVER
Upon failure to vacate the Premises on the Term Expiration Date, Tenant
shall pay to Landlord one-hundred and fifty percent (150%) of the total of the
Fixed Rent and additional rent then applicable for each month or portion thereof
in which Tenant shall retain possession of the Premises or any part thereof
after the termination of this Lease, whether by lapse of time or otherwise, and
also shall pay all damages (including consequential damages, if any) sustained
by Landlord on account thereof; provided, however, that in the event of a Tenant
holdover resulting from a cause beyond the reasonable control of Tenant, not to
exceed sixty (60) days, Tenant shall pay to Landlord (i) one hundred twenty-five
(125%) of the Fixed Rent and additional rent due hereunder and no consequential
damages for the initial thirty (30) days and (ii) three hundred percent (300%)
of the Fixed Rent and additional rent due hereunder and no consequential damages
for the succeeding thirty (30) days, and Tenant shall comply with all other
terms and conditions of this Lease other than the foregoing portions of this
Article XXII as if the Lease had remained in full force and effect. The
provisions of this Article XXII shall not operate as a waiver by Landlord of any
right of re-entry provided in this Lease.
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ARTICLE XXIII
MEMORANDUM OF LEASE
Within a reasonable time following the execution of this Lease,
Landlord and the Tenant shall execute an instrument recordable in form
containing those provisions including but not limited to the Term, the
commencement and expiration date, and such other information as necessary or
appropriate to protect the interests of Tenant hereunder and to satisfy the
notice of lease statute of the State where the Premises are located. The Tenant
may record the same. The provisions of this subsection shall not operate as a
waiver by Landlord of any right of re-entry provided in this Lease.
ARTICLE XXIV
SURRENDER OF PREMISES
Upon the expiration of the Term or early termination thereof, Tenant
shall promptly peaceably yield up and surrender the Premises in a good and clean
condition, and in the same condition as Tenant is required to maintain the
Premises hereunder during the Term, ordinary wear and tear and damage by
casualty excepted.
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ARTICLE XXV
ESTOPPEL CERTIFICATES
Upon the request of either party, at any time and from time to time,
Landlord and Tenant agree to execute and deliver to the other within fifteen
(15) business days after receipt of such request, a written instrument, duly
executed in the form attached hereto as Exhibit "I".
ARTICLE XXVI
ADDITIONAL PROVISIONS
26.1. BROKER. Landlord and Tenant warrant to each other that the only
Broker(s) ("Broker(s)") that have been retained in connection with the
negotiation and consummation of this Lease are R.W. Altreuter of Whittier
Partners and Bruce Grean of The Leggatt Company. Landlord covenants that it
shall pay any and all commissions, fees and amounts owing to the Broker(s)
arising from the negotiation and/or consummation of this Lease. Each party
agrees to defend, indemnify and save the other harmless from and against any and
all claims for a commission arising out of a breach of the representation made
in the first sentence of this Section 26.1. The within covenant shall survive
the expiration or earlier termination of this Lease.
26.2. BIND AND INURE. The obligations of this Lease shall run with the
land, and this Lease shall be binding upon and
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inure to the benefit of the parties hereto and their respective successors and
assigns except that only the Landlord named herein shall be liable for
obligations accruing before the beginning of the Term and thereafter each
successive owner of the Premises shall be liable only for obligations accruing
during the period of its ownership, said liability terminating as to future
liability upon termination of such ownership and passing to the successor in
ownership.
26.3. PROVISIONS SEPARABLE. It is agreed that if any provisions of this
Lease shall be determined to be void by any court of competent jurisdiction in
the State where the Premises are located, then such determination shall not
affect any other provision of this Lease, all of which other provisions shall
remain in full force and effect; and it is the intention of the parties hereto
that if any provision of this Lease is capable of two constructions, one of
which would render the provision void, and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
26.4. ENTIRE AGREEMENT. This instrument contains the entire and only
agreement between the parties as to the Premises, and no oral statements or
representations or prior written matter not contained in this instrument shall
have any force or effect. This Lease shall not be modified in any way except by
a writing subscribed by both parties.
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26.5. RIGHT OF FIRST OFFER.
Landlord hereby grants to Tenant the following rights with regard to
the fee interest in the Premises and a ground leasehold estate in the Lot
(collectively, the "Offer Property") or any portion thereof so long as in any
case (i) there does not then exist an Event of Default by Tenant under this
Lease or any lease with Tenant for any other space within the Office Park,
including but not limited to the lease for Building 5 of the Office Park, and
(ii) the Tenant specified in Section 1.1 hereof is then leasing at least
seventy-five percent (75%) of the Building.
In the event Landlord shall (i) decide to offer for sale the Offer
Property, or any portion thereof, Landlord shall forthwith give notice to Tenant
of its intention to sell the same, together with a proposed purchase price or
lease terms. Tenant shall have the right, for a period of thirty (30) days after
such notice of intention to sell or lease, to notify Landlord of Tenant's
interest in purchasing or leasing the same at said price or lease terms
specified in Landlord's notice or at such other price or lease terms specified
by Tenant (the "Tenant's Offer Notice"). If (i) Tenant so notifies Landlord, and
(ii) Landlord and Tenant agree on a purchase price or lease terms, and on such
other terms and conditions of purchase and sale or leasing within twenty (20)
days of Tenant's Offer Notice by executing a mutually agreeable purchase and
sale agreement or
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lease, then Tenant shall post with Landlord a ten percent (10%) non-refundable
deposit and the Offer Property, or such portion thereof, shall be sold or leased
by Landlord to Tenant, in the same condition as at the time of the posting of
the deposit, within ninety (90) days upon execution of a mutually agreeable
purchase and sale agreement or lease at the price or lease terms and upon those
other terms and conditions identified thereunder.
If Landlord does not accept Tenant's price or lease terms specified in
Tenant's Offer Notice, Landlord shall specify a final price or lease terms to
Tenant (the "Landlord's Price or Lease Terms") by giving written notice thereof
to Tenant ("Landlord's Notice"). If (i) Landlord so notifies Tenant, and (ii)
Landlord and Tenant agree on the Landlord's Price or Lease Terms specified in
Landlord's Notice, and on such other terms and conditions of purchase and sale
or leasing within twenty (20) days of Landlord's Notice by executing a mutually
agreeable purchase and sale agreement or lease, then Tenant shall post with
Landlord a ten percent (10%) non-refundable deposit and the Offer Property, or
such portion thereof, shall be sold or leased by Landlord to Tenant, in the same
condition as at the time of the posting of the deposit, within ninety (90) days
of the execution of a mutually agreeable purchase and sale agreement or lease at
the Landlord's Price or Lease Terms.
If Tenant thereafter defaults in its obligation to Landlord under this
subsection, Landlord shall retain as liquidated
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damages the Tenant's deposit and all interest earned thereon, which such deposit
shall be Landlord' sole and exclusive remedy at law or in equity for Tenant's
default under this Section 26.5. If Tenant does not exercise its option of first
offer, or if, after using good faith efforts, Landlord and Tenant do not agree
on a purchase price or lease terms or on a mutually agreeable purchase and sale
agreement or lease, then Landlord shall be free for a period of three hundred
sixty-five (365) days thereafter to sell or lease the Offer Property, or such
portion thereof, subject to this Lease to any third party for a price or lease
terms equal to or greater (with respect to price) or more favorable (with
respect to lease terms) than the Landlord's Price or Lease Terms. If Landlord
does not sell or lease the Offer Property within said three hundred sixty-five
(365) day period pursuant to the terms and conditions of the purchase and sale
agreement or lease, Tenant's right under this Section 26.5 shall revive and
continue.
Notwithstanding the aforesaid, Tenant's rights set forth in this
Section 26.5 shall not be applicable to transfers and sales to Affiliates (as
herein defined) of Landlord or The Gutierrez Company, transfers or sales to any
party of any limited partnership interest in the limited partnership which is
Landlord, transfers or sales of any general partnership interest in the limited
partnership which is Landlord to an Affiliate, the placing of any bona fide
mortgage on the Building or any
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<PAGE> 114
ground leasehold interest therein or any portion thereof or to the foreclosure
thereof or to the delivery of a deed or any other transfer in lieu of such
foreclosure, or any sale and leaseback transaction, any exercise of an option to
acquire an ownership interest in the Building or the Lot pursuant to any equity
or convertible mortgage, and to any partial sale of an undivided interest or any
joint venture transaction in lieu of conventional mortgage financing so long as
the Landlord, The Gutierrez Company or their Affiliates continue to own at least
twenty percent (20%) beneficial interest in the Building or the Lot, provided,
however, that Landlord shall give notice to Tenant (i) ten days before the grant
by Landlord of any deed in lieu of such foreclosure, and (ii) forthwith of the
institution of any foreclosure under any mortgage of the Building or the Lot.
Any such transfer or sale shall be subject to the terms and provisions of this
Lease.
As used herein, the term "Affiliate" shall mean as to any Landlord (i)
Arturo J. Gutierrez, John A. Cataldo, and other employees of The Gutierrez
Company, or members of their immediate family (as defined below); (ii) the legal
representative, successor or assignee of, or any trustee of a trust for the
benefit of Arturo J. Gutierrez, John A. Cataldo, and other employees of The
Gutierrez Company or members of their immediate family; or (iii) any entity of
which a majority of the voting interests is owned by any one or more of the
persons
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<PAGE> 115
referred to in the preceding clauses (i) and (ii). Immediate family shall mean,
with respect to any person, his spouse, children, adopted children, parents,
parents-in-law, and grandchildren.
26.6. GOVERNING LAW. This Lease shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
26.7. NO WAIVER. Failure of either party to complain of any act or
omission on the part of the other party, no matter how long the same may
continue, shall not be deemed to be a waiver of any rights hereunder. No waiver
by either party at any time, express or implied, or any breach of any provisions
of this Lease shall be deemed a waiver of a breach of any other provision of
this Lease or a consent to any subsequent breach of the same or any other
provision. If any action of any party shall require the consent or approval of
the other party, the consent to or approval of such action on any one occasion
shall not be deemed a consent to or approval of said action on any subsequent
occasion or a consent to or approval of any other action on the same or any
subsequent occasion, and such consent or approval shall not be unreasonably
withheld or delayed.
26.8. RIGHTS SEPARATE. Any and all rights and remedies which either
party may have under this Lease or by operation of law, either at law or in
equity, upon any breach, shall be distinct, separate and cumulative and shall
not be deemed
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<PAGE> 116
inconsistent with each other; no one of them whether exercised by the other
party or not, shall be deemed to be exclusive of any other, and any two or more
of all of such rights and remedies may be exercised at the same time.
26.9. SINGULAR AND PLURAL. Words and phrases used in the singular shall
be deemed to include the plural and vice versa, and nouns and pronouns used in
any particular gender shall be deemed to include any other gender.
26.10. HEADINGS. The various terms which are defined in Articles of
this Lease or are defined in Exhibits annexed hereto shall have the meanings
specified in such Articles and such Exhibits for the purposes of this Lease and
all agreements supplemental thereto, unless the context clearly indicates the
contrary.
26.11. PARKING. Tenant's occupancy of the Premises shall include the
use of 3.0 parking spaces per 1,000 square feet of floor area, as shown on
Landlord's Plans. There shall be a minimum of three hundred (300) parking spaces
for the exclusive parking by Tenant.
26.12. NON-RECOURSE. Tenant agrees to look solely to Landlord's then
equity interest in the Premises and the proceeds thereof at the time owned for
recovery of any judgment from Landlord; it being agreed that neither Landlord
(original or successor), nor any partner (general or limited), associate,
participant, principal (disclosed or undisclosed), agent,
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<PAGE> 117
employee, trustee or other fiduciary, beneficiary, officer, or other person or
entity in or of any partnership, association, joint venture, corporation or
other entity, trust, or estate from time to time owning Landlord's interest in
this Lease, shall ever be personally liable for any such judgment or for the
payment of any monetary obligation to Tenant (it being agreed by Tenant that
such exoneration from personal liability is and shall be absolute and complete
with no exception whatsoever).
With respect to any services to be furnished or obligations to be
performed by Landlord to Tenant, except with respect to the negligence of
Landlord, its employees or agents, Landlord shall never be liable for failure to
furnish or perform the same when prevented from doing so by strike, lockout,
breakdown, accident, order or regulation of or by any governmental authority, or
failure of supply, or inability by the exercise of reasonable diligence to
obtain supplies, parts or employees necessary to furnish such services, or
because of war or other emergency, or for any or other Force Majeure causes
beyond Landlord's reasonable control as defined in Section 9.5 of this Lease, or
for any cause due to any act or omission of Tenant, Tenant's invitees,
customers, servants, agents, employees, licensees or any person claiming by,
through or under Tenant.
26.13. SELF-HELP. If Landlord shall have failed to perform any of
Landlord's covenants hereunder, including without limitation any covenants to
make repairs to or restoration of
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<PAGE> 118
the Premises in accordance with the provisions of Articles IX and XIII, within
the time periods set forth herein, Tenant shall have the right, but not the
obligation, to perform any of such covenants for the account of Landlord after
giving Landlord five (5) days' prior written notice of Tenant's intention so to
do and provided that Landlord has not commenced and diligently pursued the same
within such five (5) day notice period. If Tenant shall undertake such
performance, Landlord shall reimburse Tenant for all costs and expenses
reasonably incurred by Tenant in connection with such performance ("Self-Help
Costs") within twenty (20) days after receipt of an invoice therefor from Tenant
(together with any backup documentation reasonably satisfactory to Landlord). If
Landlord shall fail so to reimburse Tenant for such Self-Help Costs, Tenant
shall have the right to offset the unreimbursed Self-Help Costs against ten
percent (10%) of the monthly Fixed Rent due hereunder until such unreimbursed
Self-Help Costs have been reimbursed in full.
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<PAGE> 119
IN WITNESS WHEREOF, the parties hereto have duly executed this Lease as
of this 26th day of July, 1996.
t
LANDLORD: MICHELSON FARM-WESTFORD
TECHNOLOGY PARK TRUST
By:
____________________, Class A
Trustee of Michelson Farm- Westford
Technology Park Trust, on behalf of
himself and his co-Class A Trustee
in their capacities as said trustees
and not individually
Dated:
By:
____________________, Class B
Trustee of Michelson Farm- Westford
Technology Park Trust, on behalf of
himself and his co-Class B Trustee
in their capacities as said trustees
and not individually
Dated:
TENANT: GENRAD, INC.
By:
Its:__________________________________
Dated:
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<PAGE> 1
EXHIBIT 11
GENRAD, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------- ----------------------------
JUNE 29, July 1, JUNE 29, July 1,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
PRIMARY
Weighted average number of
shares outstanding 21,901,000 20,801,000 21,681,000 20,709,000
Shares deemed outstanding from
the assumed exercise of stock options 2,080,000 1,089,000 1,889,000 706,00
------------ ------------ ----------- -----------
Total: 23,981,000 21,890,000 23,570,000 21,415,000
============ ============ =========== ===========
Earnings applicable to common shares $ 5,711,000 $ 2,618,000 $12,660,000 $ 6,931,000
============ ============ =========== ===========
Earnings per share of common stock $ 0.24 $ 0.12 $ 0.54 $ 0.32
============ ============ =========== ===========
FULLY DILUTED:
Weighted average number of
shares outstanding 21,901,000 20,801,000 21,681,000 20,709,000
Shares deemed outstanding from
the assumed exercise of stock options 2,259,000 1,350,000 2,259,000 1,351,000
------------ ------------ ----------- -----------
Total: 24,160,000 22,151,000 23,940,000 22,060,000
============ ============ =========== ===========
Earnings applicable to common shares $ 5,711,000 $ 2,618,000 $12,660,000 $ 6,931,000
============ ============ =========== ===========
Earnings per share of common stock $ 0.24 $ 0.12 $ 0.53 $ 0.31
============ ============ =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 29, 1996 AND THE CONSOLIDATED STATEMENTS
OF OPERATIONS FOR THE PERIOD ENDED JUNE 29, 1996 FOR GENRAD, INC. AND
SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-END> JUN-29-1996
<EXCHANGE-RATE> 1
<CASH> 4,321
<SECURITIES> 0
<RECEIVABLES> 50,211
<ALLOWANCES> 820
<INVENTORY> 19,612
<CURRENT-ASSETS> 78,351
<PP&E> 101,360
<DEPRECIATION> 82,931
<TOTAL-ASSETS> 105,658
<CURRENT-LIABILITIES> 40,864
<BONDS> 50,759
0
0
<COMMON> 22,031
<OTHER-SE> (28,543)
<TOTAL-LIABILITY-AND-EQUITY> 105,658
<SALES> 35,959
<TOTAL-REVENUES> 45,168
<CGS> 16,024
<TOTAL-COSTS> 20,946
<OTHER-EXPENSES> 17,015
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,019
<INCOME-PRETAX> 6,188
<INCOME-TAX> 477
<INCOME-CONTINUING> 5,711
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,711
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
