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EXHIBIT 10.11
COMMERCIAL LEASE
1. PARTIES.
This Lease, dated as of this 23rd day of August 2000, is made by and
between URQUHART FAMILY LLC, a Massachusetts limited liability company with a
usual office at 205 School Street, Gardner, Massachusetts 01440 ("Landlord") and
PRECISION OPTICS CORPORATION, INC. a Massachusetts corporation with a usual
office at 22 East Broadway, Gardner, Massachusetts 01440 ("Tenant").
2. SUMMARY OF BASIC TERMS.
As used in this Lease, the following terms shall have the meanings set
forth below, subject to the qualifications, adjustments and exceptions set forth
elsewhere in this Lease:
(a) PREMISES: Approximately 4,877 square feet of first floor office space,
and approximately 1,716 square feet of second floor office space, and
approximately 30,777 square feet of first floor industrial space (for a total of
approximately 37,370 square feet) located on the first and second floors of the
Building, designated as Building 24 and located substantially as shown on the
floor plans attached hereto as Exhibit A annexed hereto and incorporated herein
by reference, together with the right to use, in common with others entitled
thereto, the stairways and elevators providing access to the leased area and the
right to use, in common with others, the parking areas and driveways providing
access to the parking areas as provided in this Lease and the right to use the
loading docks and other entrances serving the Premises. The Premises shall not
include use of the railroad line or the railroad siding.
(b) BUILDING: The office building and manufacturing building located on the
Land (as defined below) at 205 School Street, bounded by Sanborn Street,
Chestnut Street, and South Lincoln Street, and including all plazas, lobbies,
landscaped areas, office and commercial space, manufacturing space, and parking
areas. The Building contains approximately 306,000 square feet.
(c) LAND: The parcels of land upon which the Building is located, which
constitute all of the premises described in a deed of Simplex Time Recorder
Company to Landlord dated April 4, 2000 and recorded in Worcester District
Registry of Deeds, Book 22471, Page 119, and also the land described in a deed
of Simplex Time Recorder Company to Landlord dated April 4, 2000 and registered
with the Worcester Registry District of Worcester County, as Document No. 72016.
The Land is shown as Lot D on a plan entitled, "Title Insurance Survey Prepared
for Urquhart Family LLC and South Lincoln Realty LLC, Gardner, MA, December 2,
1999, Szoc Surveyors, 32 Pleasant St., Gardner, MA." recorded in Worcester
District Registry of Deeds, Plan Book 754, Plan 8.
(d) PERMITTED USE: Office use and uses incidental thereto only as to those
areas rented as office space (that is, approximately 6,593 square feet of office
space located on
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the first and second floors of the Building), and industrial and warehouse use
and related uses only as to that portion of the Premises rented as industrial
space (that is, approximately 30,777 square feet of industrial space located on
the first floor of the Building).
(e) LEASE TERM: Commencing on the date hereof and continuing until the
Expiration Date.
(f) SCHEDULED RENT COMMENCEMENT DATE: November 1, 2000.
(g) EXPIRATION DATE: October 31, 2005.
(h) INITIAL MONTHLY RENT: $5,441.33 per month.
(i) RENTABLE AREA OF PREMISES: 37,370 square feet (which number shall be
conclusive for all purposes hereunder).
(j) BASE YEAR: the calendar year during which the Scheduled Rent
Commencement Date Occurs.
(k) LEASE YEAR: each twelve (12) month period commencing with the
Commencement Date.
(l) TENANT'S SHARE: 12.212%, except as otherwise expressly provided in this
Lease. The Tenant's Share of costs of rubbish removal for common areas, snow
plowing and snow removal, water and sewer use charges and landscaping expenses
shall be as provided in Section 7.2 of this Lease. The Tenant's Share of capital
costs for improvements made to common areas, systems, or facilities serving the
Premises shall be 12.212%, as set forth above. The Tenant's Share of capital
costs for improvements made to those buildings in which the Premises are located
shall be a fraction, the numerator of which is the total number of square feet
in such building which are occupied by the Tenant, and the denominator of which
is the total number of square feet in such building. In measuring the number of
square feet, the method used shall be consistent with the method used in
calculating the number of square feet in the Premises and the Building.
(m) SECURITY DEPOSIT: $5,441.33.
(n) TENANT'S PARKING: see Article 26.
(o) TENANT'S GUARANTOR: None.
(p) LANDLORD'S BROKER: Keleher & Sadowsky Associates, Inc., 196 Park
Avenue, P.O. Box 400, Worcester, MA 01613-0400.
(q) TENANT'S BROKER: None.
(r) LANDLORD'S ADDRESS FOR NOTICES: Urquhart Family LLC, 205 School Street,
Gardner, Massachusetts 01440.
(s) TENANT'S ADDRESS FOR NOTICES: Precision Optics Corporation, 22 East
Broadway, Gardner, Massachusetts 01440, Attn. Chief Financial Officer.
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(t) COMPLETION DATE. The Scheduled Rent Commencement Date or, if later, the
date on which the Landlord has delivered exclusive possession of the Premises to
the Tenant in the condition specified in Section 4.1 of the Lease.
3. LEASE AND TERM.
Landlord hereby leases the Premises to Tenant and Tenant hereby leases the
Premises from Landlord, subject to all of the terms, covenants and conditions in
this Lease. The Premises are leased for the Lease Term, unless sooner terminated
pursuant to the provisions of this Lease. Notwithstanding the foregoing, until
the Rent Commencement Date, Tenant shall have access to and use of the Premises
solely for the purposes of fixturing as provided in Section 4.4 of this Lease.
4. POSSESSION.
4.1 POSSESSION. The Landlord will deliver possession of the Premises to the
Tenant free and clear of all other occupants and their possession, broom clean,
with all of the Landlord's Work (as specified in Article 10.1 and on Exhibit B)
completed.
4.2 DELAY IN DELIVERY OF POSSESSION. If Landlord cannot deliver possession
of the Premises in the condition set forth in Section 4.1 to Tenant on the
Scheduled Commencement Date for any reason, this Lease shall not, except as
provided in the last sentence of this Section 4.2, be void or voidable, nor
shall Landlord be liable to Tenant for any Liabilities resulting therefrom, and
Tenant waives the provisions of any Laws to the contrary. In this case, the
Lease Term and the regular installments of Monthly Rent and additional rent
payable by Tenant shall not commence until Landlord delivers possession of the
premises. If Landlord delivers and Tenant accepts possession of the Premises and
commences business operations on the Premises prior to the Scheduled Rent
Commencement Date, the Lease Term shall commence on the date Tenant accepts
possession and all of the terms, covenants and conditions of this Lease,
including, without limitations, Tenant's obligations to pay the Monthly Rent and
additional rent hereunder, shall commence as of such date. If the Lease Term
commences earlier or later than the Scheduled Rent Commencement Date, this Lease
shall nevertheless expire on the Expiration Date, unless sooner terminated
pursuant to the terms hereof. Notwithstanding the foregoing, if the Landlord is
not able to deliver possession of the Premises to the Tenant within sixty (60)
days after the Scheduled Rent Commencement Date, then the Tenant may elect to
terminate this Lease by delivering written notice to Landlord on or before
seventy (70) days after the Scheduled Rent Commencement Date, and upon such
timely written notice, any rent, security deposit, and amounts due pursuant to
Section 4.5 for Real Property Taxes and Operating Expenses and Fuel Costs paid
by the Tenant shall be refunded and this Lease shall then be null and void and
without recourse to any of the parties hereto.
4.3 DELAYS CAUSED BY TENANT. Notwithstanding anything to the contrary in
Section 4.1, if Landlord's failure to deliver possession of the premises to
Tenant on the Scheduled Rent Commencement Date results from Tenant's (or its
agents' or employees') acts or omission, the Monthly Rent and additional rent
payable by Tenant shall
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commence on the date when Landlord would have delivered possession of the
Premises but for such acts or omissions.
4.4 RENT COMMENCEMENT DATE. The term "Rent Commencement Date" means the
Completion Date or, if earlier, the date on which the Tenant commences its
business operations on the Premises. Upon Landlord's request, Tenant shall
confirm the Rent Commencement Date in writing, but Tenant's failure to do so
shall not affect the commencement of the Lease Term. Tenant's obligations to pay
the Monthly Rent, shall commence as of such date.
4.5 FIXTURING PERIOD. Prior to the Rent Commencement Date, the Tenant shall
have access to the Premises at all reasonable times for the purpose of the
Tenant installing the Tenant's furniture, fixtures and equipment and the Tenant
performing such alterations as the Tenant is permitted to perform under the
terms of this Lease (the "Fixturing Period"). During the Fixturing Period, the
Tenant will not commence the Tenant's business operations on the Premises. No
Monthly Rent shall be due during the Fixturing Period but the Tenant shall pay
to the Landlord the amount of $143.50 [($1.40 divided by 365) x 37,370] per day
for each day of the Fixturing Period to reimburse Landlord for Operating
Expenses, Real Property Taxes and Fuel Costs. The Fixturing Period shall end on
the Rent Commencement Date.
5. RENT.
5.1 MONTHLY RENT. Tenant shall pay to Landlord as rent for the Premises a
monthly rent (the "Monthly Rent") equal to the Initial Monthly Rent, adjusted
periodically as set forth in Section 5.2. The Monthly Rent shall be payable in
advance on or before the first day of the first full calendar month after the
Rent Commencement Date (the "First Month") and on or before the first day of
each successive calendar month thereafter during the Lease Term, except that the
Monthly Rent for the First Month (and for the period [if any] between the Rent
Commencement Date and the First Month) has been paid upon the execution of this
Lease. The Monthly Rent for any period during the Lease Term which is for less
than one (1) month shall be prorated based on a the number of days in such
month. The Monthly Rent and all other rent hereunder shall be paid without prior
notice or demand, without deduction or offset, in lawful money of the United
States of America which shall be legal tender at the time of payment, at the
office of the Building or to another person or at another place as Landlord may
from time to time designate in writing. The term "additional rent" means all
other amounts payable by Tenant hereunder (whether or not designated as
additional rent).
5.2 ADJUSTMENT OF MONTHLY RENT. The Monthly Rent shall be increased on the
first calendar anniversary of the Rent Commencement Date and on the second
calendar anniversary of the Rent Commencement Date. On the first calendar
anniversary of the Rent Commencement Date, the Monthly Rent shall be $7,082.37
per month, for that month and the ensuing eleven months. On the second calendar
anniversary of the Rent Commencement Date, the Monthly Rent shall be $8,895.54
per month, for that month and for each month of the remaining Lease Term.
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6. SECURITY DEPOSIT.
The Tenant has deposited the Security Deposit with Landlord. The Security
Deposit shall be held by Landlord as security for the performance of all of
Tenant's obligations during the Lease Term. Upon any default by Tenant as
defined in Article 19 of this Lease, Landlord may, but shall not be obligated
to, use, apply or retain all or any part of the Security Deposit for the payment
of any rent in default, or any other Liabilities which Landlord may incur as a
result of or in connection with Tenant's default. If any portion of the Security
Deposit is so used or applied, Tenant shall, within five (5) days after written
demand therefor, deposit cash with Landlord in an amount sufficient to restore
the Security Deposit to its previous amount. Landlord shall not be required to
keep the Security Deposit separate from its general funds, and Tenant shall not
be entitled to receive interest on the Security Deposit. The unused portion of
the Security Deposit shall be returned to Tenant (or, at Tenant's option, to the
last assignee of Tenant's interest hereunder) within thirty (30) days after the
expiration or sooner termination of the Lease Term and the surrender of
possession of the Premises to Landlord in the condition required hereby.
7. REAL PROPERTY TAXES, FUEL COSTS, AND OPERATING EXPENSES.
7.1 DEFINITIONS. As used in this Lease, the following terms have the
meanings set forth below:
(a) COMPARISON YEAR. Each calendar year after the Base Year, all or any
portion of which falls within the Lease Term.
(b) REAL PROPERTY TAXES. Any fee, license fee, license tax, business
license fee, commercial rental tax, levy, charge, assessment, penalty or tax
imposed by any taxing authority against the Land or the Building; any tax on
Landlord's right to receive, or the receipt of, rent or income from the Land or
the Building; any tax or charge for fire protection, streets, sidewalks, road
maintenance, refuse or other services provided to the Land or the Building; any
charge or fee replacing any tax previously included within this definition. The
Landlord agrees to pay all special assessments over the longest installment
period allowed by law. Real Property Taxes do not include Landlord's federal or
state net income, franchise, inheritance, gift or estate taxes, transfer taxes,
stamp taxes or deeds excise taxes. Real Property Taxes also do not include real
property taxes which are specifically attributable to improvements made by or
for the benefit of the Landlord or another tenant if such improvements are to an
unusually high or extraordinary standard not in keeping with the standard of the
Building generally.
(c) FUEL COSTS. The costs actually incurred by Landlord for all
electricity, gas, oil, and other fuel used in providing heating, ventilating and
air conditioning to the Building.
(d) OPERATING EXPENSES. All reasonable costs and expenses of operating,
maintaining and repairing the Building and the Land actually incurred by the
Landlord, including, but not limited to: water and sewer charges; insurance
premiums for all property, casualty and liability insurance policies covering
the Land, Building, or the operations of Landlord that are required to be
maintained hereunder or are otherwise
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reasonably deemed necessary by Landlord; deductible amounts under insurance
policies; janitorial services; wages of Landlord's employees engaged in the
operation, maintenance or repair of the Building or the Land, including all
customary employee benefits, Worker's Compensation and payroll taxes; legal,
accounting and other consulting fees; the cost of electricity for common areas
which is not separately metered to Tenants; the cost of air conditioning,
heating, ventilation, water and other services and utilities other than Fuel
Costs; elevator maintenance; maintenance of the lawns and landscaping, snow
removal and snow plowing, maintenance, repair and replacement of the roof,
appropriately amortized over the useful life of such improvements; additions and
improvements to the common areas of the Building not within the Premises in
order to comply with any present or future requirements of the Americans with
Disabilities Act or any similar law or regulation, appropriately amortized over
the useful life of such improvements; capital improvements and replacements to
all or any portion of the Building and the Land made after completion of the
Building, appropriately amortized over the useful life of such improvements; all
costs and expenses incurred by Landlord to make capital improvements,
appropriately amortized over the useful life thereof, which Landlord is required
to make in order to comply with any Laws enacted before or after the date
hereof, including, but not limited to, Laws pertaining to energy, natural
resources conservation, safety or environmental protection; supplies, materials,
equipment and tools; and maintenance and repair of all parking and common areas.
(e) Notwithstanding anything in the Lease to the contrary, the terms
"Operating Expenses" or similar terms defined in the Lease, shall not mean and
shall exclude any and all fees, charges, disbursements, obligations, Monthly
Rent, Real Property Taxes, Fuel Costs, or costs and expenses not expressly
authorized by the Lease, such exclusions including, without limitation, the
following:
(i) ADDITIONS. The cost of any additions to the Building subsequent to
the date of original construction, except that capital improvements and
replacements are expressly permitted to be charged as Operating Expenses;
(ii) CAPITAL COSTS; CAPITAL LEASE COSTS. Except as otherwise expressly
permitted in this Lease, any and all of the Landlord's capital costs incurred in
connection with the making of any capital improvements, alterations, repairs,
and/or replacements to any portion of the Building, including, without
limitation, any financing-related fees, costs and expenses, and professional
fees and disbursements incurred in connection with the making of such capital
improvements; rentals and other expenses incurred in leasing systems, elevators,
or other equipment ordinarily considered to be of a capital nature; except that
the Landlord shall include in Operating Expenses such capital costs as are
incurred to make improvements to: (A) common areas, facilities or systems of the
Building or the Land that service the Premises, or (B) "Building 24"; or (C)
such other "Building" comprising the Building in which any portion of the
Premises are located;
(iii) CASUALTY AND CONDEMNATION COSTS. Costs incurred to repair or
restore the Building or improvements on the Land which are damaged due to fire,
windstorm or other cause or casualty insured or required to be insured hereunder
(except
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that any such costs incurred by Landlord may be passed through by Landlord as an
Operating Expense up to the amount of any insurance deductible permitted
hereunder); costs incurred to repair or restore the Building or any improvements
on the Land after a condemnation of all or any portion thereof;
(iv) FINANCING COSTS. Any and all of Landlord's payments for (a) loan
principal or interest, together with expenses thereto related in connection with
such financing or any refinancing during the term of the Lease, (b) ground lease
rent, if any (c) charges, rentals, obligations or payments of any kind for the
financing of any work or (d) similar payments;
(v) DEPRECIATION. Any charge for depreciation of the Building or
equipment and any interest or other financing charge;
(vi) LANDLORD'S TAXES. Any and all of Landlord's income, excise,
franchise taxes, excess profit taxes, and any and all taxes which do not
uniquely pertain to the Premises or Tenant's specific use thereof or similar
taxes on Landlord's business;
(vii) RECORDATION AND TRANSFER FEES. Any documentary and transfer
taxes imposed in connection with the Lease or any other lease; deeds excise,
deed stamp or other transfer taxes imposed upon or incurred by Landlord in
connection with the purchase or any future sale of all or any portion of its
interest in the Land or the Building;
(viii) LEASING COSTS. Any and all of Landlord's costs to lease space
in the Building to all prior, existing and prospective tenants, including,
without limitation: consulting and marketing fees, advertising expenses,
brokerage commissions, legal fees, vacancy costs, rent or other rent
concessions, and/or refurbishment or improvement expenses; and costs of
preparing, improving or altering any space in preparation for occupancy of any
new or renewal tenant; including, without limitation, all costs incurred by
Landlord to deliver possession of the Premises to Tenant in accordance with
Sections 4.1, 10.1 and Exhibit B of this Lease; rent for management or leasing
offices;
(ix) SALARIES. Salaries of Landlord's employees who are not engaged in
the day-to-day management and maintenance of the Premises; provided, however,
that a portion of the salaries of employees engaged or part-time in such
management who are accountants, bookkeepers, clerks, administrative assistants,
and secretaries shall be chargeable as Operating Expenses, but only to the
extent such salary may be properly and equitably allocated to the management and
operation of the Building;
(x) RELATED PARTY FEES. Wages, salaries, fees and fringe benefits paid
to administrative or executive personnel or officers or partners of Landlord
unless employed at competitive rates as would be paid to independent
contractors; any other operating expense representing an amount paid to a
related corporation, entity or person that is in excess of the amount that would
be paid in the absence of such relationship;
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compensation paid to clerks, attendants or other persons in commercial
concessions operated by Landlord;
(xi) ENFORCEMENT COSTS. Any and all of Landlord's costs to compel full
performance under leases with all prior, existing and prospective tenants at the
Building, including, without limitation, all legal fees costs and expenses to
collect rent arrears and recover possession, but this provision shall not affect
the Landlord's right to collect enforcement costs of the Tenant as provided
elsewhere in this Lease;
(xii) COSTS OTHERWISE RECOVERED. The cost of any items for which
Landlord is reimbursed by insurance; the cost of any items or services for which
Tenant reimburses Landlord directly hereunder or which are paid by Tenant
directly to third parties hereunder; the cost of any items for which Landlord is
reimbursed by other tenants of the Building pursuant to clauses in leases with
such other tenants of the Building substantially the same as the clause, if any,
in the Lease requiring Tenant to pay a proportionate share of operating expenses
or operating costs of the Project or Building; the cost of items and services
that Landlord provides selectively to one or more tenants of the Building other
than Tenant; the cost of items and services that Landlord provides to one or
more tenants of the Building in substantially greater quantities than provided
to Tenant to the extent of the excess as reasonably determined;
(xiii) LANDLORD COMPLIANCE COSTS. The cost of overtime or other
expense to Landlord in curing its defaults or performing work expressly provided
in the Lease to be borne at Landlord's expense; penalties or interest paid or
payable by Landlord on account of violations of or deviations from the
requirements of statutes, laws, regulations, notices or ordinances on any part
of the Land or the Building (including, without limitation, penalties or
interest for failure to pay Real Property Taxes when due) other than the
Premises (except for fines, penalties, or interest due to the action or inaction
of the Tenant) and any costs or expense resulting from Landlord's violation of
any agreement to which it is a party; costs incurred to test, survey, cleanup,
contain, abate, remove or otherwise remedy hazardous materials or wastes or
asbestos-containing materials from the Land unless the wastes or
asbestos-containing materials were in or on the Land due to Tenant's negligence
or intentional acts or are otherwise the responsibility of Tenant pursuant to
Section 8.3 hereof;
(xiv) BAD DEBT COSTS. Any and all collection costs, including legal
fees and bad debt losses or reserves; and
(xv) ABOVE MARKET COSTS. Any otherwise permissible fees or costs, to
the extent the same are in excess of prevailing and competitive rates; Operating
Expenses shall be calculated using generally accepted accounting principles
consistently applied. If Landlord makes an expenditure that falls within the
definition of an Operating Expense hereunder for a capital improvement to the
Land or the Building (including, without limitation, installing energy
conservation or labor-saving devices to reduce operating expenses) or to comply
with any law, ordinance or regulation pertaining to the Land or
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the Building, and if, under generally accepted accounting principles, such
expenditure is not a current expense, then the cost thereof shall be amortized
over a period equal to the useful life of such improvement, determined in
accordance with generally accepted accounting principles, and the amortized
costs allocated to each year of the Lease Term shall be treated as an Operating
Expense, but in the case of energy conservation or labor saving devices then
only to the extent of cost savings actually realized. Notwithstanding anything
in this Lease to the contrary, Landlord and Tenant acknowledge and agree that
Tenant's Share of Operating Expenses (not including Real Property Taxes or Fuel
Costs) hereunder in any year: (i) attributable to the cost of repairs or
improvements to the Land or Building required to comply with Law or the
amortized cost of capital expenditures properly allocable to such year shall not
exceed, in the aggregate, $0.40 per square foot of Premises and (ii) shall not
exceed, in the aggregate, $2.25 per square foot of Premises per year. Said
limitation of $2.25 of Operating Expenses per square foot of the Premises per
year shall not apply to Tenant's Share of Real Property Taxes or Fuel Costs.
7.2 PAYMENT OF REAL PROPERTY TAXES AND FUEL COSTS AND OPERATING EXPENSES.
In addition to the Monthly Rent, the Tenant shall pay, as additional rent,
commencing on the Rent Commencement Date, the Tenant's Share of the Real
Property Taxes, the Tenant's Share of Fuel Costs and the Tenant's Share of the
Operating Expenses for the month or partial month of the Base year in which the
Rent Commencement Date occurs and during each month of the Base Year thereafter
which falls within the Lease Term and during each month of each Comparison Year
which falls within the Lease Term. Tenant's Share of the Real Property Taxes and
of the Fuel Costs and of the Operating Expenses shall be prorated for any
partial Year which falls within the Lease Term. In addition to the Tenant's
Share of the Real Property Taxes, the Tenant will pay to the Landlord the entire
amount of (and not only the Tenant's Share of) all Real Property Taxes which are
specifically attributable to improvements made by or for the benefit of the
Tenant if such improvements are to an unusually high or extraordinary standard
not in keeping with the standard of the Building generally. Notwithstanding any
other provision of this Lease to the contrary, but subject to the last sentence
of Section 7.1 of this Lease, until the earlier to occur of (i) 75% of the
square footage of the Building is rented or (ii) 75% of the office space in the
Building is rented, "Tenant's Share" of Operating Expenses for the cost of snow
plowing/snow removal, water and sewer charges, landscaping and rubbish removal
for the common areas and shall equal the total cost incurred by the Landlord for
such items for all of the Building and Land for the applicable period multiplied
by a fraction, the numerator of which is one, and the denominator of which is
the number of tenants in the building (counting Landlord and New England Wooden
Ware Corporation as one tenant).
7.3 MANNER OF PAYMENT. Landlord shall deliver to Tenant a statement showing
the actual amount of the Real Property Taxes, if the actual amount is known, or
Landlord's reasonable estimate of the Real Property Taxes, if the actual amount
is not yet known, for the Base Year and for each Comparison Year, and the amount
of Tenant's Share of the Real Property Taxes based on such statement. Landlord
shall also deliver to Tenant a reasonably detailed statement showing Landlord's
reasonable estimate of the Fuel Costs and Operating Expenses for the Base Year
and for each Comparison Year and the amount
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of Tenant's Share of the Fuel Costs and Operating Expenses based on such
estimate. Commencing on the Rent Commencement Date or, if such day is not the
first day of a calendar month, commencing as of the first day of the first full
calendar month after the Rent Commencement Date, and on or before the first day
of each successive calendar month thereafter during the Lease Term, Tenant shall
pay to Landlord, at the times and in the manner provided herein for the payment
of Monthly Rent, one-twelfth (1/12) of Tenant's Share of any and all estimated
Real Property Taxes and Fuel Costs and Operating Expenses as shown by Landlord's
statement, except that the Tenant's Share of the Real Property Taxes and Fuel
Costs and the Operating Expenses for the First Month and for the have been paid
upon the execution of this Lease. The Real Property Taxes and Fuel Costs and the
Operating Expenses for any period during the Lease Term which is for less than
one (1) month shall be prorated based on the number of days in such month. If
Landlord's statement is furnished after January 1 of a Comparison Year, then on
or before the first day of the first calendar month following Tenant's receipt
of Landlord's statement, in addition to the monthly installment of Tenant's
Share of any increases due on that date, Tenant shall pay the amount of Tenant's
Share of the Real Property Taxes and Fuel Costs and Operating Expenses for each
calendar month or fraction thereof that has already elapsed in such Comparison
Year.
7.4 FINAL STATEMENTS. Reasonably promptly after the end of the Base Year
and each Comparison Year (including the Comparison Year in which the Lease Term
terminates), Landlord shall deliver to Tenant a reasonably detailed final
statement of the actual Real Property Taxes, Operating Expenses and Fuel Costs
for such Comparison Year. Within ten (10) days of delivery of each final
statement, Tenant shall pay Landlord the amount due for Tenant's Share of any
Operating Expenses, Real Property Taxes and Fuel Costs. Tenant will be entitled
once for the Base Year and each Comparison Year (plus one time for each Landlord
adjustment in Operating Expenses and Real Property Taxes and Fuel Costs) to
audit and verify the operations of the Building and the related books and
records of Landlord to assure that the Operating Expenses and Real Property
Taxes and Fuel Costs from time to time reported by Landlord are in keeping with
the provisions of the Lease. In the event of any error, Landlord shall make a
correcting payment in full to Tenant within 30 days after the determination of
the amount of such error. Tenant shall have forty-five (45) days after delivery
of Landlord's final statement or any restatement thereof to object in writing to
the accuracy of such statement and request to perform an audit. Tenant shall
have sixty (60) days after providing Landlord notice of such objection to
complete such audit, during which period Landlord shall make available to Tenant
(or its agents) at the Building office during usual business hours the
applicable books and records of Landlord, and shall permit Tenant, at its
expense, to make copies of such books and records. If Tenant does not object
within such forty-five (45) day period, Landlord's final statement shall be
conclusive and binding on Tenant, absent manifest error. Objections by Tenant
shall not excuse or abate Tenant's obligation to make the payments required
under this Section 7.4 (or under Section 7.3) pending the resolution of Tenant's
objection. Any credit due Tenant for overpayment of Tenant's Share of any
Operating Expenses, Real Property Taxes and Fuel Costs shall be credited against
the installments of Monthly Rent next coming due, or, if the Lease Term has
expired, promptly refunded to the Tenant.
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8. USE OF PREMISES.
8.1 PERMITTED USE. Tenant shall use the premises only for Permitted Use and
shall not use or permit the Premises to be used for any other purpose.
8.2 RESTRICTIONS ON USE. Tenant shall not do or permit anything to be done
in or about the Premises nor bring or keep anything therein which will: (a)
increase the premiums payable for property insurance required to be carried by
Landlord hereunder above the rates otherwise payable in respect of
industrial/office facilities of similar, age, condition and class to be used for
the Permitted Use or, cause the cancellation of or otherwise adversely affect
any casualty or other insurance for the Building or any part thereof or any of
its contents, unless (i) in the case of increased insurance premiums, the Tenant
pays the entire amount of such increase attributable to Tenant's particular and
specific use or, (ii) in the case of cancellation, the Tenant procures
replacement insurance on terms reasonably acceptable to Landlord, or (iii) in
the case of other adverse effect, the Tenant at its expense remedies such
adverse effect; (b) impair the proper and economic maintenance, operation and
repair of the Building or any portion thereof; (c) obstruct or interfere with
the rights of other tenants or occupants of the Building or injure or annoy
them; or (d) cause any nuisance in or about the Premises or the Building. Tenant
shall not use or allow any part of the Premises to be used for the storage,
manufacturing or sale of food or beverages or for retail sale or auction of
merchandise, goods or property of any kind other than the incidental sale at
retail of items manufactured at the Premises, or as a school or classroom, or
for any unlawful purpose. For the sake of clarification and without limiting the
generality of the preceding sentence, incidental office and industrial uses
shall include the right, subject to Articles 8 and 9 hereof, to use portions of
the premises to provide lunch rooms/commissary space for Tenant's employees,
licensees and invitees (but not to the general public), including, but not
limited to, the installation and use of standard kitchen appliances and beverage
and food vending machines. Tenant shall not commit or allow to be committed any
waste to the Premises or the Building. The Tenant will not make any use of the
Premises or the Building or the Land which would violate the provisions of that
certain Notice of Activity and Use Limitation dated April 4, 2000, recorded in
Worcester District Registry of Deeds, Book 22465, Page 105. Without limiting the
generality of the foregoing, the Premises and the Building will not be used for
a residence, school, day care, nursery, children's playground, other children's
recreational use, agricultural use, growing fruits or vegetables for human
consumption, excavation activities or other activities that cause a disturbance
and/or relocation of soils and/or groundwater at the Land, or any other use not
allowed by this Lease or by the provisions of the said Activity and Use
Limitation. Subject and in addition to the requirements of Article 9 of this
Lease related to alterations by Tenant, if the Tenant performs any work in, on
or about the Land or Building, that includes excavation activities or other
activities that cause a disturbance and/or relocation of soils and/or
groundwater at the Land, then the Tenant shall give the Landlord thirty (30)
days' prior written notice of such activities, and the Tenant shall pay the
entire cost of all environmental work required because of such activities by the
Tenant, including, without limitation, proper disposal of contaminated soils and
water, the services of Landlord's
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licensed site professional, and all health and safety requirements for workers
carrying on Tenant's work.
8.3 COMPLIANCE WITH LAWS. Tenant shall not use the premises or permit
anything to be done in or about the Premises, the Building or the land which
will in any way conflict with any law, statute, ordinance, code, rule,
regulation, requirement, license, permit, certificate, judgment, decree, order
or direction of any governmental or quasi-governmental authority, agency,
department, board, panel or court applicable to the Premises (singularly and
collectively "Laws"). Tenant shall, at its expense, promptly comply with all
Laws and with the requirements of any board of fire insurance underwriters or
other similar bodies now or hereafter constituted, relating to or affecting the
condition, use or occupancy of the Premises. Tenant shall not be required to
make structural changes to the Premises unless they arise or are required
because of or in connection with Tenant's specific use of the Premises, or the
business conducted by Tenant in the Premises, or Tenant's Alterations or
Tenant's acts or omissions. Tenant at Tenant's expense will comply with any
present and future requirements of the Americans with Disabilities Act within
the Premises. In no event shall the legal and regulatory compliance obligation
of Tenant under the Lease be construed as requiring Tenant (i) to comply with
any Laws or Legal Requirements (as hereinafter defined) affecting those portions
of the Building or the Land comprising the common areas or otherwise outside the
Premises, or (ii) to restrict Tenant's use of the Premises and common areas as
contemplated by the Lease. Tenant shall obtain and maintain in effect during the
Lease Term all licenses and permits required for the proper and lawful conduct
of Tenant's business in the Premises, and shall at all times comply with such
licenses and permits. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action or proceeding (whether Landlord is a party or
not) that Tenant has violated any Laws shall be conclusive of that fact as
between Landlord and Tenant.
8.4 COMPLIANCE WITH ALL HAZARDOUS MATERIALS LAWS, REGULATIONS, POLICIES,
ORDERS, ETC. Tenant agrees that it will comply fully and promptly with any and
all applicable hazardous materials laws, regulations, statutes, ordinances,
policies and orders issued by any federal, state, county or local governmental
authority; that it will obtain, maintain in full force and effect, and strictly
comply with any and all governmental permits, approvals and authorizations
necessary for the conduct of its business operations; that it will supply
Landlord with copies of any such permits, approvals and authorizations; that it
will promptly notify Landlord of the expiration or revocation of any such
permits, approvals and authorizations; and that it will promptly notify Landlord
and supply Landlord with a copy of any notice of violation of any environmental
law, regulation, statute, ordinance, policy or order Tenant receives
(collectively the "Legal Requirements"). Tenant agrees not to store, release,
discharge or dispose of any oil or hazardous waste or substances on or about the
Premises except in compliance with all applicable Legal Requirements. The Tenant
at Tenant's expense will remove, clean up, and remedy any oil or hazardous waste
or substance on or about the Premises to the extent required by law if and to
the extent the presence of such oil or hazardous waste or substance resulted
from the action or inaction of the Tenant, or those for whom the Tenant is
legally responsible. The Tenant shall be obligated to continue to pay the
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Monthly Rent and the Real Property Taxes and the Operating Expenses and the Fuel
Costs and all additional rent due hereunder while such removal, clean up or
remedy is completed, whether or not the Lease Term shall terminate or expire.
The Tenant hereby indemnifies and holds the Landlord harmless on account of all
costs and expenses, including reasonable attorney's fees, incurred by the
Landlord, whether during or after the Lease Term, as a result of the storage,
release, discharge or disposal by the Tenant, or by those for whom the Tenant is
legally responsible, of any oil or hazardous waste or substances on or about the
Premises. The Landlord hereby indemnifies and holds the Tenant harmless on
account of all costs and expenses, including reasonable attorney's fees,
incurred by the Tenant, whether during or after the Lease Term, as a result of
(i) the existence or presence of any hazardous materials in, on or under or
otherwise migrating to or from the Land or the Building or (ii) the storage,
release, discharge or disposal by the Landlord, or by those for whom the
Landlord is legally responsible, of any oil or hazardous waste or substances on
or about the Land or the Building (including, but not limited to, the Premises).
8.5 TENANT'S RIGHT TO CONTEST. To the extent that Tenant is responsible for
compliance with Laws or Legal Requirements, Tenant shall have the right, at its
sole cost and expense, to contest by appropriate proceedings diligently
conducted in good faith, in the name of Tenant or, with the prior written
consent of Landlord, in the name of Landlord, or both, the validity or
application of any Laws or Legal Requirements of any nature affecting Tenant or
its use of the Premises. If compliance with any of such Laws or Legal
Requirements legally may be delayed pending the prosecution of any proceeding,
without incurring any lien, charge or liability of any kind against the
Premises, or against Landlord's interest in the Building and/or the Premises or
sale of the Building, and without subjecting Tenant or Landlord to any
liability, civil or criminal, interest or penalty for failure to comply, Tenant
may delay compliance until the final determination of the proceeding.
8.6 SMOKING. Smoking shall not be permitted in the Building or on the Land
except in smoking areas designated by Landlord (subject to such Rules and
Regulations as Landlord may from time to time promulgate with respect to such
activity); PROVIDED, HOWEVER, that unless prohibited by applicable Law and
subject to such reasonable Rules and Regulations as Landlord may from time to
time promulgate with respect to such activity, smoking shall be permitted
outside the Building on the Land on a designated external portion of the loading
dock platform adjacent to the loading dock within the Premises so long as Tenant
provides appropriate containers for extinguishing and disposing of cigarettes
and trash and maintains such smoking area free and clear of cigarette butts and
other refuse.
9. ALTERATIONS AND ADDITIONS.
9.1 LANDLORD'S CONSENT.
(a) Tenant shall not make or permit to be made any alterations, additions
or improvements (singularly and collectively "Alterations") to or of the
Building or the
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Premises or any part thereof without the prior written consent of Landlord in
each instance. However, Landlord's consent shall not be required for minor
decorations of the Premises such as wall coverings and wall hangings, built-in
cabinetry and movable partitions, nor for the installation of furnishings and,
subject to the provisions of Section 11.2, office or other equipment, nor for
any interior non-structural alteration costing less than $20,000 for any project
or series of related alterations.
(b) Landlord will not unreasonably withhold its consent to any Alterations
provided and upon the condition that all of the following conditions shall be
satisfied: (i) the Alterations do not affect the outside appearance of the
Building; (ii) the Alterations are nonstructural and do not impair the strength
of the Building or any part thereof; (iii) the Alterations are to the interior
of the Premises and do not adversely affect any part of the Building outside of
the Premises; (iv) the Alterations do not affect the proper functioning of the
heating, ventilating and air conditioning ("HVAC"), mechanical, electrical,
sanitary or other utilities, systems and services of the Building, or materially
increase the usage thereof by Tenant; (v) Landlord shall have approved the final
plans and specifications for the Alterations and all contractors who will
perform them, which approval shall not be unreasonably withheld, conditioned or
delayed; (vi) Tenant pays to Landlord the reasonable costs and expenses actually
incurred by Landlord in reviewing Tenant's plans and specifications. Unless all
of the foregoing conditions are satisfied, Landlord shall have the right to
withhold its consent to the Alterations in Landlord's sole and absolute
discretion. Notwithstanding the foregoing, any structural or non-structural
changes to the existing Building involving welding are discouraged and are not
to be undertaken without the prior consent of the Landlord.
(c) Not less than ten (10) days nor more than twenty (20) days prior to
commencement of any Alterations, Tenant shall notify Landlord of the work
commencement date so that Landlord may post notices of non-responsibility about
the Premises. All Alterations must comply with all Laws, the other terms of this
Lease, and the final plans and specifications approved by Landlord, and Tenant
shall fully and promptly comply with and observe the rules and regulations of
Landlord then in force and applicable to the Tenant hereunder with respect to
the making of Alterations. Landlord's review and approval of Tenant's plans and
specifications are solely for Landlord's benefit. Landlord shall have no duty
toward Tenant, nor shall Landlord be deemed to have made any representation or
warranty to Tenant, with respect to the safety, adequacy, correctness,
efficiency or compliance with Laws of the design of the Alterations, the plans
and specifications therefor, or any other matter regarding the Alterations.
9.2 OWNERSHIP AND SURRENDER OF ALTERATIONS. Upon their installation, all
Alterations, including, but not limited to, wall covering, paneling and built-in
cabinetry, but excluding movable furniture, trade fixtures and office or
moveable equipment ("Tenant's Property"), shall become a part of the realty and
belong to Landlord and shall be surrendered with the Premises. However, upon the
expiration, Tenant shall, at Tenant's expense, remove any Alterations made by
Tenant which are designated by Landlord to be removed in notice given to Tenant
at least ninety (90) days prior to the
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expiration of the Lease Term and repair any damage to the Premises caused by
such removal.
9.3 LIENS. Tenant shall pay when due all claims for labor, materials and
services furnished by or at the request of Tenant or Tenant's Affiliates. Tenant
shall keep the Premises, the Building and the Land free from all liens, security
interests and encumbrances (including, without limitation, all mechanic's liens)
created as a result of or arising in connection with the Alterations or any
other labor, services or materials provided for or at the request of Tenant or
Tenant's Affiliates, or any other act or omission of Tenant or Tenant's
Affiliates, or persons claiming through or under them. (Such liens, security
interests and encumbrances singularly and collectively are herein called
"Liens.") Tenant shall indemnify Landlord and Landlord's Affiliates for, and
hold Landlord and Landlord's Affiliates harmless from and against: (a) all
Liens; (b) the removal of all Liens and any actions or proceedings related
thereto; and (c) all Liabilities incurred by Landlord or Landlord's Affiliates
in connection with the foregoing. If Tenant fails to keep the Premises, the
Building and the land free from Liens after the expiration of ten (10) business
days after notice thereof by the Landlord, then, in addition to any other rights
and remedies available to Landlord, Landlord may take any action necessary to
discharge such Liens, including, but not limited to, payment to the claimant on
whose behalf the Lien was filed. Tenant shall indemnify Landlord for, and hold
Landlord harmless from and against, all Liabilities so incurred by Landlord,
without regard to any defense or offset that Tenant may have had against the
claimant. The Landlord's curative action shall not cure Tenant's default in
failing to keep the Premises, the Building and the Land free from Liens.
9.4 ADDITIONAL REQUIREMENTS. Alterations shall comply with all Laws.
Tenant, at its expense, shall obtain all necessary permits and certificates for
the commencement and performance of Alterations and for final approval thereof
upon completion, and shall cause the Alterations to be performed in compliance
therewith and with all applicable insurance requirements, and in a good,
first-class and workmanlike manner. Tenant, at its expense, shall diligently
cause the cancellation or discharge of all notices of violation arising from or
otherwise connected with Alterations, or any other work, labor, services or
materials done for or supplied to Tenant or Tenant's Affiliates, or by any
person claiming through or under Tenant or Tenant's Affiliates. Alterations
shall be performed so as not to interfere unreasonably with any other tenant in
the Building, or with the maintenance, repair or operation of the Building.
Throughout the performance of the Alterations, Tenant, at its expense, shall
carry, or cause to be carried, in addition to the insurance described in Article
13, Workers' Compensation insurance in statutory limits and such other insurance
as Landlord may reasonably require, with insurers reasonably satisfactory to
Landlord. Tenant shall furnish Landlord with satisfactory evidence that such
insurance is in effect at or before the commencement of the Alterations and,
upon request, at reasonable intervals thereafter until completion of the
Alterations.
10. REPAIRS.
10.1 CONDITION OF PREMISES. The premises shall be delivered to Tenant broom
clean but otherwise in "as is" condition and, except as otherwise provided
herein, with
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"all faults" and Landlord shall have no obligation whatsoever to alter, remodel,
improve, repair, decorate or paint the Premises or any part thereof either prior
to or during the Lease Term except to the extent expressly provided in Exhibit B
annexed hereto and incorporated herein by reference. By accepting possession of
the Premises, Tenant shall be deemed to have acknowledged that the Premises are
suitable for its purposes and in good condition and repair. Subject to Section
10.2, Tenant, at its expense, shall keep the Premises and every part thereof in
good condition and repair and shall, upon the expiration or sooner termination
of the Lease Term, surrender the Premises to Landlord broom clean and in good
condition and repair, ordinary wear and tear excepted. Tenant acknowledges and
agrees that it has inspected, or prior to the Commencement Date will inspect,
the Premises and that Tenant is not relying on any representations or warranties
made by Landlord or Landlord's Affiliates regarding the premises, the Building
or the Land except as may be expressly set forth herein.
10.2 LANDLORD'S OBLIGATION TO REPAIR. Subject to Article 14, Landlord shall
repair and maintain in good order the common areas, roof, windows, and the
structural portions of the Building, including, but not limited to, the
structural portions of the roof, the foundations, exterior load-bearing walls,
and the basic HVAC, mechanical, electrical and plumbing systems installed by
Landlord in the Building. However, if the repair or maintenance is caused in
whole or in part by the act, neglect, fault or omission of Tenant or Tenant's
Affiliates, or by Tenant's Alterations, Tenant immediately shall pay for such
repair or maintenance and shall indemnify Landlord for any hold Landlord
harmless from and against all other Liabilities incurred by Landlord in
connection therewith, provided that under such circumstances the Tenant shall
not be obligated to pay for such repair or maintenance if the same is covered by
any property insurance policy maintained or required to be maintained by
Landlord. Landlord shall have a reasonable time after written notice from Tenant
to perform necessary repairs or maintenance
10.3 TENANT'S RIGHT TO CURE. If the Landlord fails to perform Landlord's
obligations to repair under Article 10.2 of this Lease (as such repair
obligation is limited by Article 14) or if the Landlord fails to complete the
Landlord's Work as specified in Article 10.1 and in Exhibit B to this Lease,
then the Tenant may cure such act or omission of the Landlord at the Landlord's
expense but only if the Tenant shall first give written notice of Landlord's act
or omission to Landlord and the Landlord, after receipt of such notice, shall
fail to correct or cure the act or omission within thirty (30) days thereafter,
or within a reasonable period of time in the case of an emergency. However,
nothing contained in this Article 10.3 shall impose any obligation on the Tenant
to correct or cure any act or omission of the Landlord.
11. SERVICES AND UTILITIES.
11.1 LANDLORD'S SERVICES. Subject to the rules and regulations of the
Building, Landlord shall furnish to the Premises heating, ventilating and air
conditioning reasonablY required for the comfortable use and occupancy of the
Premises. Landlord shall also furnish water and plumbing to the Building.
Landlord shall furnish janitorial services for common areas, as hereinafter
provided. Landlord shall also maintain and keep lighted the common stairs,
entries, and common restrooms, if any, in the Building.
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The Landlord will plow those parking lots which the Tenant has the right to use
and the driveways necessary for access to said parking lots and to the loading
docks and entrances serving the Premises. Landlord shall keep clear of ice and
snow all common area pedestrian sidewalks and common area Building entrances.
The Landlord will maintain the lawns and plantings which are presently on the
Land.
11.2 TENANT'S SERVICES. To the extent practical or reasonable, electricity
for the Premises shall be separately metered in the Tenant's name. In addition
to the rent, the Tenant shall pay the cost of all electricity for the Premises
which is separately metered to the Tenant. To the extent practical or
reasonable, the Tenant will pay the cost of installing a separate electric
meter, submeter or "check" meter for the Premises. In cases where it is not
reasonable or practicable to meter separately portions of the Premises, the
Landlord will submit to the Tenant a reasonable estimate of the electricity used
by Tenant and Tenant will pay the cost of electricity which it uses. All rubbish
removal for the Premises will be provided by the Tenant.
11.3 RESTRICTIONS ON USE. Without the prior written consent of Landlord in
each instance, which will not be unreasonably withheld, conditioned or delayed,
Tenant shall not use or install any apparatus, device or equipment in the
Premises, including, but not limited to, electronic data processing machines,
punch card machines or which will in any way increase the amount of water,
electricity not separately metered to the Tenant, or HVAC normally furnished for
similar space in the Building. Landlord may condition its consent on, among
other things, the installation of additional risers, feeders and other
appropriate equipment as well as meters in the Premises to measure the amount of
water and electricity consumed. Tenant shall pay to Landlord on demand the cost
of: (a) purchasing, installing, maintaining and repairing such equipment and/or
meters and units; (b) all water and electricity consumed as shown by said
meters, at the rates charged by the local utility company; and (c) any
additional expense incurred in connection with the foregoing. If a separate
meter is not installed, the cost for of excess water and electricity will be
established by an estimate made by a utility company or electrical engineer
selected by Landlord. Tenant shall not connect any apparatus, device or
equipment except through existing electrical outlets in the Premises.
11.4 JANITORIAL SERVICES. The Landlord shall provide janitorial services to
the common areas only, the common hallways and stairways leading to the
Premises. Such services shall be provided customarily on a weekly basis.
Janitorial services shall be those customarily furnished for similar buildings
in the general vicinity of the Building.
11.5 HOURS OF OPERATION AND ACCESS. HVAC for and access to the Premises
shall be provided seven (7) days a week, twenty-four hours per day.
11.6 HANDICAPPED-ACCESSIBLE REST ROOMS. The parties acknowledge that there
are handicapped-accessible rest rooms in the Building that are near but are not
located within the Premises. For such time as said rest rooms are located within
premises is leased to or otherwise used or occupied by Landlord or New England
Wooden Ware Corporation or any of their affiliates, then the Tenant shall have
the non-exclusive right to use said handicapped-accessible rest rooms and the
elevator providing access to them. The Tenant's right to use said rest rooms
shall cease upon the Tenant being notified by
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Landlord that the space has been leased to another tenant not affiliated with
Landlord or New England Wooden Ware Corporation. In that case, the Landlord
shall not have any obligation to provide alternate handicapped-accessible rest
rooms for the Tenant.
11.7 COMPRESSED AIR AND CHILLED WATER. The Landlord shall not have an
obligation to provide compressed air or chilled water to the Tenant unless the
Landlord and the Tenant arrive at a separate mutually satisfactory agreement for
the provision of such services at a price and on other terms acceptable to both
parties. The cost of the Landlord providing any compressed air and chilled water
to Tenant is not included in the Monthly Rent or in the Operating Expenses.
12. ENTRY BY LANDLORD.
Landlord shall have the right as provided herein to enter the Premises in
order to: inspect the Premises; post notices of non-responsibility; show the
Premises to prospective purchasers, lenders or tenants; to have access to the
freight elevator located within the Premises for use by Landlord or Landlord's
tenants, licensees or invitees (it being understood that use of the freight
elevator door located within the Premises by Landlord and others during the
Lease Term hereof is meant to be on an occasional basis for the purpose of
moving furniture, equipment or other heavy objects to or from other portions of
the Building and not to be used by Landlord or its other tenants to move
freight, inventory or other materials to or from other portions of the Building
as part of any such person's usual business operations); perform its obligations
and exercise its rights hereunder; and make repairs, improvements, alterations
or additions to the Premises or the Building or any portion thereof as Landlord
deems necessary or desirable and to do all things necessary in connection
therewith, including, but not limited to, erecting scaffolding and other
necessary structures. Landlord shall retain (or be given by Tenant) keys to
unlock all of the doors to or within the Premises, excluding doors to Tenant's
vaults and files. Landlord shall have the right to use any and all means
necessary to obtain entry to the Premises in an emergency. Landlord's entry to
the Premises in accordance with this Article 12 shall not, under any
circumstances, be deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction of Tenant from the Premises or any portion
thereof. Except in the case of emergency, the Landlord shall exercise the
Landlord's right to enter the Premises only after reasonable prior notice to
Tenant, during usual and customary business hours, in the presence of the
Tenant, and in a manner so as not to interfere unreasonably with Tenant's
business operations. Except in the case of emergency, twenty-four hours' prior
notice shall be considered reasonable notice. Except in the case of emergency,
the Landlord will comply with all customary security, safety and other workplace
rules applicable to the Tenant's employees or to outside visitors when making
such entry. Notwithstanding anything in this Article 12 to the contrary, Tenant
shall, except in the case of emergency, have the right to postpone any proposed
use of the freight elevator by Landlord, its tenants, licensees and invitees for
up to 48 hours if Tenant, in its reasonable judgment, determines that such
proposed use of the freight elevator would be disruptive to its business being
conducted in the Premises and provides Landlord with notice of such postponement
prior to 3:00 p.m. on
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the day before any such proposed use of the freight elevator, which notice shall
specify in reasonable detail Tenant's reasons for such postponement.
13. INSURANCE.
13.1 TENANT'S CASUALTY INSURANCE. At all times during the Lease Term,
Tenant, at its expense, shall maintain in effect policies of casualty insurance
covering all of Tenant's Property and other personalty from time to time in, on
or about the Premises, in an amount not less than their full replacement cost
(without deduction for depreciation) from time to time during the term of this
Lease. Such policies shall provide for protection against any perils normally
included within the classification of "All Risks" or "Special Causes of Loss",
and shall contain, if applicable, endorsements covering: demolition and
increased cost of construction; water damage, vandalism and malicious mischief;
liability for changes in Laws.
13.2 TENANT'S PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE. At all times
during the Lease Term, Tenant, at its expense, shall maintain Comprehensive
General Liability Insurance (including property damage) with respect to the
ownership, maintenance, use, operation and condition of the Premises and the
business conducted therein. Such insurance shall at all times have limits of not
less than $2 million combined single limit per occurrence for bodily injury,
personal injury and property damage liability. At Landlord's request, these
limits shall be increased from time to time during the Lease Term (but not more
often than once every two years) to such higher limits as Landlord or its
insurance consultant believe are necessary to protect Landlord, consistent with
the practices of similar Landlords in the Gardner, Massachusetts market. The
amount of such insurance shall not limit Tenant's liability nor relieve Tenant
of any obligation hereunder. Each policy shall contain cross liability
endorsements, if applicable, and shall insure Tenant's performance of the
indemnity provisions contained in Section 22.2 and elsewhere in this Lease and
any other obligations of Tenant to Landlord hereunder.
13.3 TENANT'S POLICY REQUIREMENTS.
(a) All insurance required to be carried by Tenant hereunder shall be
issued by responsible insurance companies, qualified to do business in the
Commonwealth of Massachusetts, reasonably approved by Landlord. Copies of all
policies and certificates therefor shall be delivered to Landlord at least three
(3) business days prior to Tenant's occupancy of the Premises. Each policy shall
provide that it may not be cancelled or modified except after thirty (30) days'
prior written notice to Landlord and Landlord's Mortgagee named as an additional
insured or loss payee thereunder. Tenant shall furnish Landlord with renewals or
"binders" of each policy, together with evidence of payment of the premium
therefor, at least thirty (30) days prior to expiration. Tenant shall have the
right to provide insurance coverage pursuant to blanket policies obtained by
Tenant if the blanket policies expressly afford coverage as required by this
Lease.
(b) Landlord and, if required, Landlord's Mortgagee shall be named as
additional insureds in each liability insurance policy. The Comprehensive
General Liability Insurance shall: not contain provisions affecting any rights
which Landlord or Landlord's Mortgagee or Tenant would have had as claimants if
not named as insureds;
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be primary insurance and not considered contributory, with any other valid and
collectible insurance available to Landlord and Landlord's Mortgagee
constituting excess insurance; and be endorsed as necessary to cover the
foregoing requirements.
(c) Each policy of All Risk Coverage which Tenant obtains for the Premises,
and which Landlord obtains for the Building, shall include a clause or
endorsement denying the insurer any right of subrogation against the other party
hereto to the extent that rights have been waived by the insured party prior to
the occurrence of injury or loss. Landlord and Tenant each waive any rights of
recovery against the other for injury or loss due to hazards covered by the all
risk insurance policies required to be carried by it hereunder.
13.4 TENANT'S FAILURE TO DELIVER POLICIES. If Tenant fails to deliver
copies of the insurance policies and evidence of payment therefor within the
time required pursuant to Section 13.3, Landlord may, but shall not be obligated
to, obtain the required insurance, and the cost thereof shall be payable by
Tenant to Landlord on demand. Nothing in this Article shall be deemed to be a
waiver of any rights or remedies available to Landlord under this Lease or at
law or in equity if Tenant fails to obtain and deliver the required insurance
policies and evidence of payment.
13.5 LANDLORD'S CASUALTY INSURANCE. At all times during the Lease Term,
Landlord shall maintain in effect policies of casualty insurance covering the
Building, in an amount not less than $2 million. Such policies shall provide for
protection against any perils normally included within the classification of
"All Risks" or "Special Causes of Loss", and shall contain, if applicable,
endorsements covering: water damage, vandalism and malicious mischief; liability
for changes in Laws. The Landlord shall also carry such rent loss insurance, if
any, as the Landlord elects to carry in Landlord's discretion from time to time.
13.6 LANDLORD'S PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE. At all
times during the Lease Term, the Landlord shall maintain Comprehensive General
Liability Insurance (including property damage) with respect to the ownership,
maintenance, use, operation and condition of the Building. Such insurance shall
at all times have limits of not less than $1 million combined single limit per
occurrence for bodily injury, personal injury and property damage liability.
13.7 LANDLORD'S POLICY REQUIREMENTS. All insurance required to be carried
by Landlord hereunder shall be issued by responsible insurance companies,
qualified to do business in the Commonwealth of Massachusetts. Copies of all
policies and certificates therefor shall be delivered to Tenant at least at
least three (3) business days prior to Tenant's occupancy of the Premises.
Landlord shall furnish Tenant with renewals or "binders" of each policy,
together with evidence of payment of the premium therefor, at least thirty (30)
days prior to expiration. Landlord shall have the right to provide insurance
coverage pursuant to blanket policies obtained by Landlord if the blanket
policies expressly afford coverage as required by this Lease.
14. DAMAGE OR DESTRUCTION; EMINENT DOMAIN.
14.1 LANDLORD'S RESTORATION. If the Building or the Premises are partially
damaged or totally destroyed by fire or other casualty, and if this Lease is not
terminated as
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provided in this Article, Landlord shall repair the damage and restore or
rebuild the Building or the Premises (except for Tenant's Property) after
Landlord receives notice of the damage or destruction and Landlord receives
substantially all of the insurance proceeds receivable on account of the
casualty. However, Landlord shall not be required to spend amounts in excess of
the insurance proceeds actually received for such repair, restoration or
rebuilding plus the applicable deductible. Landlord shall attempt to make any
required repairs or restoration promptly and so as not to interfere unreasonably
with Tenant's use and occupancy of the Premises, but Landlord shall not be
obligated to perform such work on an overtime or premium-pay basis.
14.2 RENT ABATEMENT. Subject to Section 14.3, if all or part of the
Premises are rendered completely or partially un-tenantable on account of fire
or other casualty, or if damage by fire or other casualty to the Building
deprives Tenant of access to the Premises for more than five (5) consecutive
days, the Monthly Rent shall be abated in the proportion that the rentable area
of the un-tenantable portion of the premises bears to the total Rentable Area of
the Premises. Such abatement shall commence on the date of the damage or
destruction and shall continue until the Premises have been substantially
repaired and Tenant has reasonable access to the Premises. However, if Tenant
reoccupies the damaged portion of the Premises prior to the date that the
Premises are substantially repaired, the Monthly Rent allocable to the
reoccupied portion shall be payable by Tenant from the date of such occupancy in
the proportion that the rentable area of the reoccupied portion of the Premises
bears to the total Rentable Area of the Premises.
14.3 EXCEPTION TO ABATEMENT. Monthly Rent shall not be abated or reduced
(a) if the Premises or a portion thereof are rendered un-tenantable due to
damage or loss of access for a period of five (5) consecutive days or less or
(b) if and to the extent that because of acts or omissions of Tenant or Tenant's
Affiliates either (i) Landlord (or any Landlord's Mortgagee) is unable to
collect all of the insurance proceeds (including, without limitation, rent
insurance proceeds) for damage or destruction of the Premises or the Building,
or (ii) the Premises or the Building was damaged or destroyed or rendered
completely or partially un-tenantable. The collection of rent by Landlord under
the circumstances described in clause (b) above shall not subject to Section
13.3(c) preclude Landlord from seeking damages from Tenant or exercising any
other rights and remedies it may have under this Lease or at law or in equity.
14.4 ELECTION TO TERMINATE. Landlord may terminate this Lease upon written
notice to Tenant if: (a) the Building or the Premises are substantially or
totally destroyed or, in Landlord's sole judgment, rendered un-tenantable by
fire or other casualty or any other cause; or (b) Building 24 or such other
"building" comprising the "Building" in which in which any portion of the leased
Premises is located is damaged or rendered un-tenantable (whether or not the
Premises are damaged or destroyed or rendered un-tenantable) so that its repair
or restoration requires the expenditure (as estimated by a reputable contractor
or architect designated by Landlord) of more than thirty-seven and one-half
percent (37 1/2%) of the amount of casualty insurance required to be carried by
Landlord on the Building pursuant to Article 13.5; or (c) less than two (2)
years remain in the Lease Term at the time of the damage or destruction or
events which render the
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Building or the Premises un-tenantable and the time necessary to repair or
restore the Building or the Premises would exceed ninety (90) days (as estimated
by a reputable contractor or architect designated by Landlord), except that the
Landlord shall not have the right to terminate under this Article 14.4 (c) if
less than two (2) years remain in the Lease Term if the Tenant has an option to
extend this Lease and if the Tenant gives written notice to Landlord that the
Tenant is exercising such option; or (d) Landlord would be required under
Section 14.2 to abate or reduce the Monthly Rent for a period in excess of six
(6) months if repairs or restoration were undertaken. If Landlord elects to
terminate this Lease, its notice of termination shall be given within ninety
(90) days after the date of the damage, destruction or events causing
un-tenantability and this Lease shall terminate on the date specified in such
notice. If the Landlord does not so elect to terminate this Lease, then the
Tenant may elect to terminate this Lease if the Premises are substantially or
totally destroyed or rendered un-tenantable by fire or other casualty or if the
Landlord fails to restore the Premises within two hundred seventy (270) days
after said casualty. Tenant shall exercise any option to terminate afforded
under this Section 14.4 by giving notice to Landlord thereof within thirty (30)
days after the event giving rise to such right (e.g. (i) the earlier of
Landlord's election not to terminate the Lease or the expiration of 60th day
after any substantial casualty giving Landlord the right to terminate or (ii)
the expiration of the 270th day after a substantial casualty if the Premises
have not been restored), and failure to give such notice within such thirty day
period shall be deemed an election by Tenant not to terminate the Lease.
14.5 EMINENT DOMAIN. Landlord may terminate this Lease upon written notice
to Tenant if twenty-five percent (25%) or more of either the Premises, the
Building or the Land is condemned, taken or appropriated by any public or
quasi-public authority under the power of eminent domain, policy power or
otherwise (or in the event of a sale in lieu thereof). Whether or not this Lease
is so terminated, Landlord shall be entitled to any and all income, rent, award,
or interest thereon which may be paid or made in connection with the taking or
appropriation, and Tenant shall have no claim against Landlord for the value of
any unexpired term of this Lease. If Landlord elects to terminate this Lease,
its notice of termination shall be given within sixty (60) days after the taking
or appropriation. If such notice is not given or if Landlord notifies Tenant of
Landlord's election not to terminate, subject to the Tenant's termination rights
set forth below, this Lease shall continue in full force and effect, except that
the Monthly Rent shall be reduced in the proportion that the rentable floor area
of the Premises which is taken bears to the total Rentable Area of the Premises.
Nothing contained in this Article shall prevent Tenant from bringing a separate
action or proceeding for compensation for any of Tenant's Property taken and
Tenant's moving expenses. If the Landlord does not so elect to terminate this
Lease, then the Tenant may elect to terminate this Lease (a) if twenty-five
percent (25%) or more of the Premises are taken by eminent domain or rendered
un-tenantable as a result of a taking, or if the Tenant's access to the Premises
is taken by eminent domain and the Landlord does not provide reasonably
satisfactory substitute means of access; or (b) if the Landlord fails to restore
the Premises to a condition substantially suitable for the Permitted Use within
ninety (90) days after said taking or appropriation. If Tenant elects to
terminate this Lease, its notice of termination shall be
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given within sixty (60) days after the taking or appropriation, if Tenant's
option to terminate arises under clause (a) of this Section 14.5; or within 120
days of said condemnation if Tenant's option to terminate arises under clause
(b) of this Section 14.5.
14.6 BUSINESS INTERRUPTION. Landlord shall not incur any Liabilities of any
type to Tenant or Tenant's Affiliates arising from or in connection with any
damage or destruction of the Premises, the Building or the Land, or any taking
or appropriation thereof, or any repairs or restoration in connection therewith,
nor, except as otherwise expressly provided herein, shall Tenant have any right
to terminate this Lease as a result thereof. However, in such event, Monthly
Rent shall be abated if and to the extent that abatement is allowed pursuant to
this Article.
14.7 WAIVER. Tenant waives the application of any Laws which are contrary
to the provisions of this Article in connection with any damage, destruction,
condemnation, taking or appropriation (or sale in lieu thereof) of all or any
portion of the Premises, the Building or the Land.
15. ASSIGNMENT AND SUBLETTING.
15.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily,
involuntarily or by operation of any Laws sell, convey, mortgage, assign, sublet
or otherwise transfer or encumber all or any part of Tenant's interest in this
Lease or the Premises without Landlord's prior written consent in each instance
which consent may be withheld in Landlord's sole and absolute discretion except
as otherwise provided in this Article, and any attempt to do so without this
consent shall be null and void.
15.2 NOTICE TO LANDLORD. If Tenant desires to assign its interest in this
Lease or to sublease all or any part of the Premises, Tenant shall notify
Landlord in writing. This notice shall be accompanied by: (a) a statement
setting forth the name and business of the proposed assignee or subtenant; (b) a
copy of the proposed assignment or sublease (and any collateral agreements)
setting forth all of the terms and the financial details of the sublease or
assignment (including, without limitation, the term, the rent and any security
deposit, and amounts payable for Tenant's Property and the common use of any
personnel or equipment); (c) financial statements certified by an independent
certified public accountant if available and other information reasonably
requested by Landlord relating to the financial condition of the proposed
assignee or subtenant; and (d) and other information concerning the proposed
assignment or sublease which Landlord may reasonably request.
15.3 CONSENT BY LANDLORD. The Landlord shall not unreasonably withhold its
consent to an assignment or subletting. (For purposes of this Article, an
assignment shall not include an assignment for security purposes, which shall be
governed by Section 15.1). Tenant irrevocably agrees that the withholding of
Landlord's consent shall be deemed reasonable if all of the following conditions
are not satisfied:
(a) The proposed assignee or subtenant shall use the Premises only for the
Permitted Use.
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(b) The proposed assignee or subtenant is reputable and has sufficient
financial capabilities to perform all of its obligations under this Lease or the
proposed sublease, in Landlord's reasonable judgment.
(c) Neither the proposed assignee or subtenant nor any person or entity
that directly or indirectly controls, is controlled by, or is under common
control with the proposed assignee or subtenant is an occupant of any part of
the Building or has negotiated for space in the Building within a (6)six-month
period prior to the delivery of Tenant's written notice.
(d) Tenant is not in default and has not committed acts or omissions which
with the running of time or the giving of notice or both would constitute a
default under this Lease.
(e) All of the other terms of this Article are complied with. The
conditions described above are not exclusive and shall not limit or prevent
Landlord from considering additional factors in determining if it should
reasonably withhold its consent.
15.4 CORPORATE AND PARTNERSHIP TRANSACTIONS. A dissolution of the Tenant's
corporation shall be deemed to be an assignment of this Lease subject to the
provisions of this Article. However, these provisions shall not apply to
transactions with a corporation or other entity into or with which Tenant is
merged or consolidated or whereby a controlling equity interest in Tenant is
transferred or to which substantially all of Tenant's assets are transferred or
which controls, is controlled by, or is under common control with, Tenant, if a
principal purpose of the merger or transfer is not the assignment of this Lease
and Tenant's successor (if any) has a net worth not less than the then net worth
of Tenant. Tenant shall cause reasonably satisfactory proof of such net worth to
be delivered at least thirty (30) days prior to the effective date of the
transaction. Notwithstanding the preceding sentence to the contrary, so long as
the Tenant is a publicly traded company, a change of control due to a purchase
of stock on the public markets shall not be deemed an assignment of this Lease
that is subject to the Landlord's consent.
15.5 NO RELEASE OF TENANT. Notwithstanding the granting of Landlord's
consent, no sale, conveyance, mortgage, pledge, subletting, assignment or other
transfer or encumbrance of this Lease or the Premises shall release or alter
Tenant's primary liability to pay rent and perform all of its other obligations
hereunder. The acceptance of rent by Landlord from any person other than Tenant
shall not be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed to be consent to any subsequent
assignment or subletting. If any assignee or successor of Tenant defaults in the
performance of any of the terms hereof, Landlord may proceed directly against
Tenant without proceeding against or exhausting its remedies against the
assignee or successor. After any assignment, sublease or other transfer or
encumbrance, Landlord may consent to subsequent assignments, subleases,
transfers or encumbrances, or amendments to this Lease, without notifying Tenant
or any other person, without obtaining consent thereto, and without relieving
Tenant of liability under this Lease.
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15.6 ADDITIONAL TERMS.
(a) Tenant shall pay the reasonable attorney's fees and other costs and
expenses of Landlord incurred in connection with any request for Landlord's
consent to any sale, conveyance, mortgage, pledge, assignment, sublease or other
transfer or encumbrance.
(b) A sublease will be null and void unless it complies with the rest of
this Lease and provides that: (i) it is subject and subordinate to this Lease
and that if there is any conflict or inconsistency between the sublease and this
Lease, this Lease will prevail; (ii) Landlord may enforce all the provisions of
the sublease, including the collection of rent; (iii) it may not be modified
without Landlord's prior written consent and that any modification without this
consent shall be null and void; (iv) if this Lease is terminated or Landlord
reenters or repossesses the Premises, Landlord may, at its option, take over all
of Tenant's right, title and interest as sublessor and, at Landlord's option,
the subtenant shall attorn to Landlord, but Landlord shall not be (x) liable for
any previous act or omission of Tenant under the sublease, (y) subject to any
existing defense or offset against Tenant, or (z) bound by any previous
modification of the sublease made without Landlord's prior written consent or by
any prepayment of more than one month's rent; and (v) it is ineffective until
Landlord gives its written consent thereto.
(c) An assignment will be null and void unless it complies with the rest of
this Lease and provides that: (i) the assignee assumes all of Tenant's
obligations under this Lease and agrees to be bound by all of the terms of this
Lease; and (ii) it is ineffective until Landlord gives its written consent
thereto.
(d) The sublease or assignment otherwise must exactly match the last
proposed sublease or assignment submitted by Tenant and approved by Landlord. A
sublease or assignment will not be effective until a fully executed counterpart
is delivered to Landlord and Landlord delivers its written consent thereto.
(e) This Article is binding on and shall apply to any purchaser, mortgagee,
pledgee, assignee, subtenant or other transferee or lienholder, at every level.
16. QUIET ENJOYMENT.
16.1 SUPERIOR LEASES AND MORTGAGES. So long as Tenant pays all rent and
performs all of its other obligations as required hereunder, Tenant shall
quietly enjoy the Premises without hindrance or molestation by Landlord or any
person lawfully claiming through or under Landlord, subject to the terms of this
Lease and the terms of any Superior Leases and Mortgages, and all agreements or
matters of record to which this Lease is subordinate. As used in this Lease, the
term "Superior Leases and Mortgages" means mortgages, or other encumbrances, and
all renewals, modifications, consolidations, replacements or extensions thereof
or advances made thereunder, affecting all or any portion of the Premises, the
Building or the Land which are presently of record, and future mortgages and
encumbrances and all renewals, modifications, consolidations, replacements or
extensions thereof or advances made thereunder, to which the Tenant is obligated
to subordinate this lease under the provisions of Article 17.1.
16.2 LANDLORD DEFAULT. In the event of Landlord's material breach of
the Lease or default hereunder and failure to cure such breach or default within
30 days after receipt of
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written notice from Tenant (or if the default is of such a nature that it cannot
be cured within 30 days, Landlord shall be afforded a reasonable amount of time
necessary to cure such default so long as it is diligently proceeding to do so),
Tenant shall be entitled to exercise all remedies available at law or equity
including without limitation, self help and/or, in its sole discretion Tenant
may terminate this Lease without any further obligations or liabilities under
this Lease, and to resort to such other and further remedies as may be available
to it at law or in equity; provided, that, in no event may Tenant exercise its
termination rights hereunder without giving any mortgagee of the Project for
which Tenant has been provided a notice address, 60 days prior written notice of
such default with opportunity to cure.
16.3 COOPERATION. As reasonably requested by Tenant, Landlord, at the
Tenant's expense, shall cooperate fully with Tenant in any efforts by Tenant to
obtain any variances, by-law changes, permits or licenses necessary or
appropriate for Tenant's use of the Premises as contemplated hereunder.
17. MORTGAGEE PROTECTION.
17.1 SUBORDINATION. This Lease shall be subject and subordinate to any
mortgage (and to any amendments, extensions, increases, refinancing or
restructurings thereof) of the Premises, whether such mortgage is recorded prior
or subsequent to the date of this Lease so long as (i) either the holder of such
mortgage agrees in writing, or the subject mortgage expressly provides, that,
for so long as Tenant is not in default under this Lease after the expiration of
any applicable notice and cure periods, such mortgagee and, its successors,
assigns and nominees, will not, in foreclosing against or taking possession of
the Premises or otherwise taking title to the Premises by acceptance of a deed
or assignment in lieu of foreclosure or otherwise exercising its rights under
such mortgage, disturb Tenant's possession of the Premises and that, upon the
occurrence of any such event, such mortgagee agrees, subject to Section 17.2
hereof, to be prospectively bound to Tenant as Landlord under all of the terms,
conditions and covenants of the Lease, and Tenant shall agree to attorn to such
mortgagee and to recognize such mortgagee as the Landlord under this Lease.
Tenant hereby agrees to execute, acknowledge, and deliver in recordable form
such instruments evidencing this subordination and attornment as Landlord or any
such mortgagee may from time to time reasonably require. However, in
confirmation of such subordination, Tenant shall execute, acknowledge and
deliver any instrument that Landlord or the lessor, mortgagee or beneficiary
under any of the Superior Leases and Mortgages may reasonably request, within
ten (10) days a reasonable time after request (Each of these lessors, mortgagees
or beneficiaries is called a "Landlord's Mortgagee.") However, if Landlord,
Landlord's Mortgagee or any other successor to Landlord elects in writing, this
Lease shall be deemed superior to the Superior Leases and Mortgages specified,
regardless of the date of recording, and Tenant will execute an agreement
confirming this election on request. Subject to the first sentence of this
Section 17.1, Landlord's Mortgagee or its successor or any successor to Landlord
succeeds to Landlord's interests under this Lease, whether voluntarily or
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involuntarily, the Tenant shall attorn to such person and recognize such person
as Landlord under this Lease.
17.2 MORTGAGEE'S LIABILITY. The obligations and liabilities of each of
Landlord or Landlord's Mortgagees, or their successors, under this Lease shall
exist only if and for so long as each of these respective parties owns fee title
to the Land and the Building or is the lessee under a ground lease therefor. No
Monthly Rent or additional rent shall be paid more than thirty (30) days prior
to the due date thereof and payments made in violation of this provision shall
(except to the extent that such payments are actually received by a Landlord's
Mortgagee) be a nullity as against Landlord's Mortgagees or their successors and
Tenant shall be liable for the amount of such payments to Landlord's Mortgagees
or their successors.
17.3 MORTGAGEE'S RIGHT TO CURE. Except for a termination of this Lease by
the Tenant following a casualty or taking by eminent domain as permitted under
Articles 14.4 and 14.5, no act or omission by Landlord which would entitle
Tenant under the terms of this Lease or any Laws to be relieved of Tenant's
obligations hereunder, or to terminate this Lease, shall result in a release or
termination of such obligations or this Lease unless: (a) Tenant first shall
have given written notice of Landlord's act or omission to Landlord and all
Landlord's Mortgagees whose names and addresses shall have been furnished to
Tenant; and (b) Landlord's Mortgagees, after receipt of such notice, fail to
correct or cure the act or omission within a reasonable time thereafter (but in
no event less than sixty (60) days). However, nothing contained in this Article
shall impose any obligation on Landlord's Mortgagees to correct or cure any act
or omission.
18. ESTOPPEL CERTIFICATES.
18.1 ESTOPPEL CERTIFICATES BY TENANT. Tenant shall from time to time,
within ten (10) days after request by Landlord, in connection with any proposed
sale or financing of the Property by the Landlord, execute and deliver to
Landlord or any other person designated by Landlord an estoppel certificate, in
form reasonably satisfactory to Landlord, which certifies: (a) that this Lease
is unmodified and in full force and effect (or, if there have been
modifications, describes them); (b) the expiration date of the Lease Term and
that there are no agreements with Landlord to extend or renew the Lease Term or
to permit any holding over (or if there are any such agreements, describes them
and specifies the periods of extension or renewal); (c) the date through which
the Monthly Rent and additional rent have been paid; (d) that Landlord is not in
default in the performance of any of its obligations under this Lease (or, if
there are any such defaults, describes them); (e) that Tenant is not entitled to
any credits, offsets, defenses or deductions against payment of the rent
hereunder (or, if they exist, describes them); and (f) such other information
concerning this Lease or Tenant as Landlord or any other person designated by
Landlord reasonably shall request. An estoppel certificate issued by Tenant
pursuant to this Article shall be a representation and warranty by Tenant which
may be relied on by Landlord and by others with whom Landlord may be dealing,
regardless of independent investigation.
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18.2 ESTOPPEL CERTIFICATES BY LANDLORD. Landlord shall from time to time,
within ten (10) days after request by Tenant, in connection with any proposed
sale or financing of the Tenant's business or the permitted assignment of this
Lease by the Tenant, execute and deliver to Tenant or any other person
designated by Tenant an estoppel certificate, in form reasonably satisfactory to
Tenant, which certifies: (a) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, describes them); (b) the
expiration date of the Lease Term and that there are no agreements with Tenant
to extend or renew the Lease Term or to permit any holding over (or if there are
any such agreements, describes them and specifies the periods of extension or
renewal); (c) the date through which the Monthly Rent and additional rent have
been paid; (d) that Tenant is not in default in the performance of any of its
obligations under this Lease (or, if there are any such defaults, describes
them); (e) that Landlord is not entitled to any other sums of money from Tenant
(or, if they exist, describes them); and (f) such other information concerning
this Lease or Landlord as Tenant or any other person designated by Tenant
reasonably shall request. An estoppel certificate issued by Landlord pursuant to
this Article shall be a representation and warranty by Landlord which may be
relied on by Tenant and by others with whom Tenant may be dealing, regardless of
independent investigation.
19. DEFAULT.
The occurrence of any one or more of the following events shall be a
"default" under this Lease by Tenant:
(a) The failure by Tenant to make any payment of rent or any other payment
required to be made by Tenant hereunder for a period of fifteen (15) days after
such payment is due.
(b) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Tenant,
other than those described in subparagraphs (a), (c) and (d) of this Article 19,
where such failure shall continue for a period of thirty (30) days after written
notice thereof by Landlord to Tenant. However, if the nature of these defaults
is such that more than thirty (30) days are reasonably required to cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure within
the thirty (30) day period and thereafter diligently pursues the cure.
(c) The making by Tenant or any guarantor of this Lease of any general
assignment or general arrangement for the benefit of creditors; or the filing by
or against Tenant or any guarantor of this Lease of a petition or order for
relief under any Laws relating to bankruptcy or insolvency (unless, in the case
of a petition filed against Tenant or any guarantor of this Lease, the petition
is dismissed within sixty (60) days); or the appointment of a trustee, custodian
or receiver to take possession of substantially all of Tenant's assets or the
assets of any guarantor of this Lease or of Tenant's interest in this Lease
where possession is not restored to Tenant within thirty (30) days; or the
attachment, execution or judicial seizure of substantially all of Tenant's
assets or of Tenant's interest in this Lease, unless discharged within thirty
(30) days.
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(d) A sale, conveyance, mortgage, pledge, assignment, sublease or other
transfer or encumbrance, in violation of Article 15.
20. REMEDIES FOR DEFAULT.
20.1 GENERAL. In the event of any default or breach by Tenant, Landlord may
at any time thereafter, with or without notice or demand:
(a) Terminate Tenant's right to possession of the Premises by any lawful
means, in which case this lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event Landlord shall
be entitled to recover from Tenant all Liabilities incurred by Landlord or
Landlord's Affiliates by reason of Tenant's default, including, but not limited
to: (i) the worth at the time of the award of the unpaid Monthly Rent and
additional rent which had been earned or was payable at the time of termination;
(ii) the worth at the time of the award of the amount by which the unpaid
Monthly Rent and additional rent which would have been earned or payable after
termination until the time of the award exceeds the amount of such rental loss
that could have been reasonably avoided; (iii) the worth at the time of the
award of the amount by which the unpaid Monthly Rent and additional rent which
would have been paid for the balance of the term after the time of award exceeds
the amount of such rental loss that could have been reasonably avoided; and (iv)
any other amount necessary to compensate Landlord for all Liabilities
proximately caused by Tenant's failure to perform its obligations under the
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, any costs or expenses incurred by
Landlord in maintaining or preserving the Premises, the Building and the Land
after such default, the cost of recovering possession of the Premises, expenses
of re-letting, including necessary renovation or alteration of the Premises,
Landlord's reasonable attorneys' fees and costs incurred in connection
therewith, and any real estate commissions paid or payable. As used in subparts
(i) and (ii) above, the "worth at the time of the award" is computed by allowing
interest on unpaid amounts at the rate of ten percent (10%) per annum, or such
lesser amount as may then be the maximum lawful rate. As used in subparagraph
(iii) above, the "worth at the time of the award" is computed by discounting
such amount at the discount rate of the Federal Reserve Bank of Boston,
Massachusetts at the time of the award, plus 1%.
(b) Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Premises. In
such event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease and at law or in equity, including the right to
recover the rent and other sums and charges as they become due hereunder.
(c) Pursue any other right or remedy now or hereafter available to Landlord
hereunder or at law or in equity.
20.2 PERFORMANCE BY LANDLORD. If Tenant defaults under this Lease,
Landlord, without waiving or curing the default, may, but shall not be obligated
to, perform Tenant's obligations for the account and at the expense of Tenant.
Notwithstanding
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Section 19(c), in the case of an emergency, Landlord need not give any notice
prior to performing Tenant's obligations.
20.3 POST-JUDGMENT INTEREST. The amount of any judgment obtained by
Landlord against Tenant in any legal proceeding arising out of Tenant's default
under this Lease shall bear interest until paid at the maximum rate allowed by
law.
21. HOLDING OVER.
Tenant shall not hold over in the Premises after the expiration or sooner
termination of the Lease Term without the express prior written consent of
Landlord. If possession of the Premises is not surrendered to Landlord on the
expiration of the Lease Term, in addition to any other rights and remedies of
Landlord hereunder or at law or in equity, Tenant shall pay to Landlord for each
month or portion thereof during which Tenant holds over in the Premises a sum
equal two (2) times the then-current Monthly Rent in addition to all other rent
payable under this Lease. If any tenancy is created by Tenant's holding over in
the Premises, the tenancy shall be on all of the terms and conditions of this
Lease, except that rent shall be increased as set forth above and the tenancy
shall be a month-to-month tenancy. Nothing in this Article 21 shall be deemed to
permit Tenant to retain possession of the Premises after the expiration or
sooner termination of the Lease Term.
22. INDEMNIFICATION AND EXCULPATION.
22.1 DEFINITIONS. As used in this Lease, the following terms have the
meanings set forth below:
(a) LIABILITIES. All losses, costs, damages, expenses, claims, injuries,
liabilities and judgments, including, but not limited to, reasonable attorneys'
fees and costs (whether or not suit is commenced or judgment entered).
(b) LANDLORD'S AFFILIATES AND TENANT'S AFFILIATES. All affiliates,
directors, officers, shareholders, partners, agents, employees, invitees,
customers, successors and assigns of Landlord and Tenant, respectively.
22.2 INDEMNIFICATION. In addition to any other indemnities required of
Tenant hereunder, Tenant shall indemnify Landlord and Landlord's Affiliates for,
and hold Landlord and Landlord's Affiliates harmless from, any and all
Liabilities arising from or in connection with any of the following, unless
caused by the negligent acts or omissions or the willful misconduct of the
Landlord: (a) the use and occupancy of the Premises by Tenant or Tenant's
Affiliates; and (b) the conduct of Tenant's business; and (c) any other
negligent acts or omissions of Tenant or Tenant's Affiliates or licensees or
invitees for whom Tenant is legally responsible that occur on the Premises.
22.3 DAMAGE TO PERSON OR PROPERTY. Tenant assumes the risk of all
Liabilities it may incur, including, but not limited to, damage or injury to
person, to Tenant's property and the conduct of Tenant's business (and any loss
of revenue therefrom), the loss of use or occupancy of the Premises, and the
items enumerated below in this Article, unless and to the extent caused by the
negligence of the Landlord, and waives all claims against Landlord and
Landlord's Affiliates in connection therewith. Landlord and Landlord's
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Affiliates shall not be liable for any Liabilities incurred by Tenant or
Tenant's Affiliates (including, but not limited to, the Liabilities described
above in this Article) arising from or in connection with: (a) acts or omissions
of any tenant of the Building or any other persons (including, but not limited
to, any parking lot operators or their employees); (b) explosion, fire, steam,
electricity, water, gas or rain, pollution or contamination; (c) the breakage,
leakage, obstruction or other defects of plumbing, HVAC, electrical, sanitary,
safety, elevator or other utilities and systems of the Building; (d) any work,
maintenance, repair, rebuilding or improvement performed by or at the request of
Landlord or Landlord's Affiliates for the Premises, the Building or the Land;
(e) any entry by Landlord or Landlord's Affiliates on the Premises; (f) any
interference with light or other incorporeal hereditaments. Nothing in this
Article exempts Landlord for liability caused by its negligence or willful
misconduct, but Landlord shall not be liable under any circumstances for
indirect or punitive damages (including, but not limited to, damage or injury to
persons, property and the conduct of Tenant's business and any loss of revenue
therefrom). Tenant shall promptly notify Landlord of any defects in the or any
portion thereof and of any damage or injury thereto. Tenant shall not be liable
to Landlord under any circumstances for indirect or punitive damages.
22.4 SATISFACTION OF REMEDIES. Landlord and Landlord's Affiliates shall not
be personally liable for the performance of Landlord's obligations under this
Lease. If Tenant or Tenant's Affiliates acquire any rights or remedies against
landlord or Landlord's Affiliates (including, but not limited to, the right to
satisfy a judgment), these rights and remedies shall be satisfied solely from
Landlord's estate and interest in the Land and the Building (or the proceeds
therefrom) and not from any other property or assets of Landlord or Landlord's
Affiliates. This Article shall be enforceable by Landlord and Landlord's
Affiliates.
23. RULES AND REGULATIONS.
Tenant shall faithfully observe and comply with the reasonable rules and
regulations that Landlord shall from time to time promulgate and that are
generally applicable to and enforced against all tenants in the Building, except
that variations in applicability and enforcement may be made for New England
Wooden Ware Corporation and its affiliates. Landlord reserves the right from
time to time in its sole discretion to make all reasonable additions and
modifications to the rules and regulations. Any additions and modifications to
the rules and regulations shall be binding on Tenant when delivered to Tenant.
Landlord shall not incur any Liabilities to Tenant or Tenant's Affiliates
arising from or in connection with the nonperformance of any rules and
regulations by any other tenants or occupants of the Building. Landlord's
current rules and regulations are attached hereto as Exhibit C. Notwithstanding
anything in this Lease to the contrary, to the extent any rule or regulation
promulgated by Landlord (including those set forth on Exhibit C hereto) is
inconsistent with or contradicts the express provisions set forth in this Lease,
the express provisions of this Lease shall control.
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24. OTHER TAXES.
Tenant shall pay, or cause to be paid, before delinquency, any and all
taxes levied or assessed against Tenant's Property. If any or all of Tenant's
Property is assessed and taxed with the Building, then the Tenant shall pay to
Landlord its share of such taxes within ten (10) days after delivery to Tenant
by Landlord of a statement in writing setting forth the amount of such taxes,
and a detailed invoice or bill showing that such taxes are attributable
specifically to the Tenant.
25. BROKERS.
Tenant represents and warrants to Landlord that Tenant has had no dealings
with any broker, finder, or similar person who is or might be entitled to a
commission or other fee in connection with introducing Tenant to the Building or
in connection with this Lease, except for Landlord's Broker and Tenant's Broker.
Landlord represents and warrants to Tenant that Landlord has had no dealings
with any broker, finder, or similar person who is or might be entitled to a
commission or other fee in connection with introducing Tenant to the Building or
in connection with this Lease, except for Landlord's Broker and Tenant's Broker.
Landlord shall pay the commission due Landlord's Broker pursuant to a separate
agreement between Landlord and Landlord's Broker. Landlord's Broker will then
pay a share of said commission to the Tenant's Broker pursuant to a separate
agreement between them. Tenant shall indemnify Landlord for, and hold Landlord
harmless from and against, any and all claims of any person other than
Landlord's Broker and other than the Tenant's Broker identified in Article 2 who
claims to have introduced Tenant to the Building or dealt with Tenant in
connection with this Lease and all Liabilities arising out of or in connection
with such claims. In addition to paying a commission due the Landlord's Broker
and the Tenant's Broker identified in Article 2, Landlord shall indemnify Tenant
for, and hold Tenant harmless from and against, any and all claims of any person
other than Tenant's Broker and other than the Landlord's Broker identified in
Article 2 who claims to have dealt with Landlord in connection with this Lease
and all Liabilities arising out of or in connection with such claims.
26. PARKING.
Subject to the provisions of this Article, the Tenant and its employees and
invitees shall have the exclusive right to use the parking spaces located in the
most easterly row of the parking lot which is located on the Land on the
southerly side of Bond Street and the westerly side of Chestnut Street known as
Parking Lot J. If the Tenant does not reasonably need all of the parking spaces
in said row, then its right to use said spaces shall be in common with the
Landlord and others claiming by, through and under the Landlord until such time
as the Tenant needs all of said spaces. If the Tenant needs more spaces than are
located in the easterly row in said lot, then the Landlord will assign to Tenant
the right to use spaces in the westerly row in said lot. In addition, Landlord
will assign to Tenant for Tenant's exclusive use five spaces in the most
westerly row in the parking lot on the northerly side of Bond Street and the
easterly side of School Street. If and to the extent that Tenant needs more
parking spaces than the number of parking spaces as are in Parking Lot J,
Landlord will, subject to the parking rights of other tenants of the Building,
allocate to Tenant additional parking spaces in such other parking lot or
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lots located on the Land (other than the parking lot in which Tenant has been
provided five exclusive spaces as set forth in the immediately preceding
sentence) that are closest to Parking Lot J or otherwise closest to the
entrances to the Premises. The Landlord will equitably allocate parking not
subject to Tenant's exclusive rights hereunder among the Tenant and all present
and future tenants in the Building. The Tenant shall bear the sole
responsibility for towing vehicles which are not entitled to park in any of
Tenant's exclusive parking spaces and otherwise enforcing the Tenant's exclusive
parking rights.
27. AUTHORITY TO ENTER INTO LEASE.
If Tenant is a corporation, each individual executing this Lease on behalf
of the corporation represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of the corporation, in accordance with a duly
adopted resolution of the board of directors of said corporation. If the Tenant
is a partnership, each individual executing this Lease on behalf of the
partnership represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of the partnership, in accordance with the
partnership agreement and any statements of partnership or certificates of
limited partnership of the partnership, and that this Lease is binding on the
partnership in accordance with its terms. Tenant shall, within thirty (30) days
of the execution of this Lease, deliver to Landlord: (a) if Tenant is a
corporation, a certified copy of a resolution of the board of directors of the
corporation; of (b) if Tenant is a partnership, a copy of the Statement of
Partnership or Certificate of Limited Partnership of Tenant; and (c) other
evidence reasonably satisfactory to Landlord authorizing or ratifying the
execution of this Lease.
28. GENERAL PROVISIONS.
28.1 JOINT OBLIGATION. If Tenant consists of more than one person or
entity, the obligations of such persons or entities as Tenant shall be joint and
several.
28.2 MARGINAL HEADINGS. The titles to the Articles and Sections of this
Lease are not a part of this Lease and shall have no effect on the construction
or interpretation.
28.3 TIME. Time is of the essence of this Lease.
28.4 SUCCESSORS AND ASSIGNS. Subject to the restrictions contained in
Article 15 above, this Lease binds the heirs, executors, administrators,
successors and assigns of the parties hereto.
28.5 RECORDATION. Tenant shall not record this Lease. At the request of
either party, the Landlord and Tenant will prepare and record a notice of lease
in such detail as the parties may reasonably request. However, no notice of
lease shall set forth the rent or other financial terms of this Lease.
28.6 LATE CHARGES. Tenant acknowledges that late payment of rent will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. These costs include, but are not
limited to, processing and accounting charges, and late charges which may be
imposed on Landlord by the terms of any Superior Leases and Mortgages.
Accordingly, if any installment of Monthly Rent or payment of additional rent
due from Tenant is not received by Landlord or
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Landlord's designee within ten (10) days after the amount is due, Tenant shall
pay to Landlord a late charge equal to five percent (5%) of the overdue amount.
Acceptance of late charges by Landlord shall not constitute a waiver of Tenant's
default with respect to the overdue amount, nor prevent Landlord from exercising
any of the other rights and remedies granted hereunder or at law or in equity.
28.7 PRIOR AGREEMENTS; AMENDMENT; WAIVER. This Lease contains all of the
agreements of the parties hereto with respect to any matter covered or mentioned
in this Lease, and no prior agreements or understanding pertaining to any such
matters shall be effective for any purpose. No provision of this Lease may be
amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest. All waivers hereunder must be
in writing and specify the breach, act, omission, term, covenant or condition
waived, and acceptance of rent or other acts or omissions by Landlord shall not
be deemed to be a waiver. The waiver by Landlord of any breach, act, omission,
term, covenant or condition of this Lease shall not be deemed to be a waiver of
any other or subsequent breach, act, omission, term, covenant or condition.
28.8 INABILITY TO PERFORM. Landlord shall not be in default hereunder nor
shall Landlord be liable to Tenant or Tenant's Affiliates for any Liabilities if
Landlord is unable to fulfill any of its obligations, or is delayed in doing so,
if the inability or delay is caused by reason of accidents, breakage, strike,
labor troubles, acts of God, or any other cause, whether similar or dissimilar,
which is beyond the reasonable control of Landlord other than financial
difficulties. Tenant shall not be in default hereunder nor shall Tenant be
liable to Landlord or Landlord's Affiliates for any Liabilities if Tenant is
unable to fulfill any of its obligations, or is delayed in doing so, if the
inability or delay is caused by reason of accidents, breakage, strike, labor
troubles, acts of God, or any other cause, whether similar or dissimilar, which
is beyond the reasonable control of Tenant other than financial difficulties.
Notwithstanding the foregoing provisions of this Article, the provisions of this
Article 28.8 shall not alter or abridge the rights of the Landlord or the Tenant
to terminate this Lease as provided in Article 14 if the Premises are damaged or
destroyed by casualty or taken by eminent domain.
28.9 LEGAL PROCEEDINGS. In any action or proceeding involving or relating
in any way to this Lease, the court or other person or entity having
jurisdiction in such action or proceeding shall award to the party in whose
favor judgment is entered the actual attorneys' fees and costs incurred. The
party in whose favor judgment is entered may, at its election, submit proof of
fees and costs as an element of damages before entry of judgment or after entry
of judgment in a post-judgment cost bill. In any circumstance where Tenant is
obligated to indemnify or hold harmless Landlord or Landlord's Affiliates under
this Lease, Tenant also shall defend Landlord and Landlord's Affiliates with
counsel reasonably acceptable to Landlord or, at Landlord's election, Landlord
or Landlord's Affiliates may employ their own counsel and Tenant shall pay when
due all reasonable attorneys' fees and costs therefor. In any circumstance where
Landlord is obligated to indemnify or hold harmless Tenant or Tenant's
Affiliates under this Lease, Landlord also shall defend Tenant and Tenant's
Affiliates with counsel reasonably acceptable to Tenant or, at Tenant's
election, Tenant or Tenant's Affiliates may employ
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their own counsel and Landlord shall pay when due all reasonable attorneys' fees
and costs therefor.
28.10 CONVEYANCE OF PREMISES. As used herein the term "Landlord" means only
the current owner or owners of the fee title to the Building or the lessee under
a ground lease of the Land. Upon each conveyance (whether voluntary or
involuntary) of the Building, the conveying party shall be relieved of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease or arising out of any act, occurrence or omission
occurring after the date of such conveyance. Landlord may sell, assign, convey,
encumber or otherwise transfer all or any portion of its interests in this
Lease, the Premises, the Building or the Land.
28.11 NAME. Tenant shall not use the name of Simplex Time Recorder Company
for any purpose including, without limitation, to identify the Building or as an
address of the business to be conducted by Tenant in the Premises.
28.12 SEVERABILITY. Any provision of this Lease which shall be held
invalid, void or illegal shall in no way affect, impair or invalidate any of the
other provisions hereof and such other provisions shall remain in full force and
effect.
28.13 CUMULATIVE REMEDIES. No right, remedy or election hereunder or at law
or in equity shall be deemed exclusive but shall, wherever possible, be
cumulative with all other rights, remedies or elections.
28.14 CHOICE OF LAW. This Lease shall be governed by the laws of the
Commonwealth of Massachusetts applicable to transactions to be performed wholly
therein.
28.15 SIGNS. Tenant shall not place any sign on the premises, the Building
or the Land, or which is visible from anywhere outside of the premises, without
Landlord's prior written consent, which will not be unreasonably withheld or
delayed. Landlord at the Landlord's expense will erect an exterior monument sign
and will make available to Tenant a panel on said monument sign. The Landlord
will also make available to Tenant a space on any interior directory sign(s)
which Landlord may erect. The Tenant will pay the cost of preparing a panel
identifying the Tenant on the exterior monument sign and any interior directory
signs. Tenant may also install reasonable safety, directional and other signage
within the Premises without the Landlord's prior written consent. In addition,
Tenant shall have the right, at its sole cost and expense, to affix and maintain
a small plaque on the Building identifying the fact that it occupies premises in
the Building and to erect and maintain one or more small signs on the landscaped
areas of the Land Westerly of School Street identifying the fact that it
occupies the premises in the Building and directing visitors and
shipping/receiving to the appropriate entrances or loading dock(s) serving the
Premises; PROVIDED, HOWEVER, that (i) the size, location, materials and design
of any such sign or signs shall be subject to Landlords' prior written consent
(such consent not to be unreasonably withheld conditioned or delayed) and, in
addition, the construction and placement of any such sign or signs shall be
deemed an Alteration subject to the requirements of Article 9 hereof.
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28.16 LANDLORD'S CONSENT. Whenever Landlord's consent or approval is
required hereunder (including, with limitation, under the Rules and
Regulations), Landlord shall not unreasonably delay the granting or withholding
of its consent or approval.
28.17 PRESUMPTIONS. This Lease shall be construed without regard to any
presumption or other rule requiring construction against the party drafting the
document. It shall be construed neither for nor against Landlord or Tenant, but
shall be given reasonable interpretation in accordance with the plain meaning of
its terms and the intent of the parties.
28.18 EXHIBITS. All exhibits and any riders annexed to this Lease are
incorporated herein by this reference.
28.19 SUBMISSION OF LEASE. The submission of this Lease to Tenant or its
broker, agent or attorney for review or signature does not constitute an offer
to Tenant to lease the Premises or grant an option to lease the Premises. This
document shall not be binding unless and until it is executed and delivered by
both Landlord and Tenant.
28.20 MEANING OF TERMS. Whenever required by the context of this Lease, the
singular shall include the plural and the plural shall include the singular, and
the masculine, feminine and neuter genders shall each include the others, and
the word "person" shall include corporations, partnerships or other entities.
28.21 NOTICES. All notices, demands or communications required or permitted
under this Lease (the "notices") shall be in writing and shall be personally
delivered or sent by certified mail, return receipt requested, postage prepaid,
or by nationally recognized overnight courier service. Notices to Tenant shall
be delivered to the address set forth in Section 2(s), or such other address as
Tenant may specify in writing to Landlord. Notices to Landlord shall be
delivered to the address set forth in Section 2(r), or such other address as
Landlord may specify in writing to Tenant. Notices shall be effective on the
earlier of: delivery, or when delivery is first refused; and two (2) days after
they are mailed in accordance with this Article.
28.22 WAIVER OF LIENS. Notwithstanding anything to the contrary contained
herein, Landlord hereby expressly waives any liens or lien rights which it may
have by statute or at common law with respect to any of Tenant's trade fixtures,
equipment or other property, including, without limitation, any of its rolling
inventory and stock. Landlord agrees to execute and deliver to Tenant or
Tenant's lender reasonable documentation confirming that Landlord had not and
will not claim a lien on any such property, and further, that Landlord will
permit such lender access to the Premises on terms reasonably acceptable to the
Landlord in order to secure any such property Tenant may have offered as
collateral.
29. RESERVED.
30. TENANT'S RIGHT OF EXPANSION.
30.1 EXCLUSIVE OPTION TO LEASE. Provided that the Tenant is not then in
material default under the provisions of this Lease, for the first twelve (12)
months after the
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Scheduled Rent Commencement Date, the Tenant shall have the exclusive option to
lease approximately 8,700 square feet of office space on the second floor of
Building 24 at a Monthly Rent of fifty cents ($0.50) per square foot per month,
plus a proportionate Tenant's Share of Real Property Taxes and Fuel Costs and
Operating Expenses. If such exclusive right to lease is exercised, the space
subject to said exclusive option shall be leased for the remainder of the Lease
Term. Said space is identified on Exhibit A. This exclusive option to lease is
exercisable only during the first twelve (12) months after the Scheduled Rent
Commencement Date and this exclusive option to lease shall expire if not
exercised within that time. The Tenant shall exercise this option by giving
written notice to Landlord no less than thirty (30) days prior to the first
anniversary of the Scheduled Rent Commencement Date. In addition to the Monthly
Rent, the Tenant's Share of the Real Property Taxes and the Fuel Costs and the
Operating Expenses shall be adjusted to reflect the additional area leased by
Tenant.
30.2 TENANT'S RIGHT OF FIRST REFUSAL TO LEASE. If the Tenant does not
exercise the Tenant's option to lease the approximately 8,700 square feet of
office space on the second floor of Building 24 as provided in article 30.1
above within the first twelve (12) months after the Scheduled Rent Commencement
Date, then the Landlord shall be free to seek other tenants for that space, but
prior to accepting any offer from a prospective tenant for the lease of said
8,700 square feet of office space, provided that the Tenant is not then in
material default under the terms of this Lease, the Landlord shall first offer
in writing to lease it to the Tenant at the same rent and upon the same terms
offered by or to a bona fide third party prospective tenant. The Tenant shall
have twenty-one (21) days from the date of said written offer by the Landlord to
accept in writing the terms offered and to execute a lease or an appropriate
amendment to this Lease. If the Tenant fails to do so, then the Tenant's right
of first refusal to lease said 8,700 square feet of space shall cease and the
Landlord shall be free to lease the same to another tenant at a price and upon
terms no more favorable than those offered to the Tenant. If the proposed lease
with the prospective tenant is not executed within one hundred twenty (120) days
after the notification by the Tenant that the Tenant does not elect to lease
said space (or within one hundred eighty (180) days after the expiration of the
Tenant's twenty-one day period to make said election if the Tenant has not
notified the Landlord of its acceptance or refusal of said terms) then the
Landlord must re-offer the space to the Tenant before concluding any other
proposed lease transaction covering said space. The Tenant agrees to execute
such documents as Landlord may reasonably request evidencing that this right of
first refusal has been complied with. This right of first refusal shall expire
upon the earlier of: (a) the Tenant failing to accept within twenty-one (21)
days a written offer from the Landlord pursuant to this article; or (b) the
Expiration Date of this Lease. This right of first refusal shall not be deemed
to be waived by the Tenant if the Landlord proposes to lease said space to a
prospective tenant on terms more favorable than those previously offered to and
rejected by the Tenant.
30.3 TENANT'S RIGHT OF FIRST REFUSAL TO LEASE. The Landlord also grants to
the Tenant a right of first refusal to lease approximately 10,500 square feet of
industrial space on the first floor of Building 23 upon the terms contained in
this Article 30.3. Said space is identified on Exhibit A. Prior to accepting any
offer from a prospective tenant
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for the lease of said 10,500 square feet of industrial space, provided that the
Tenant is not then in material default under the terms of this Lease, then the
Landlord shall first offer in writing to lease it to the Tenant at the same rent
and upon the same terms offered by a bona fide third party offeror. The Tenant
shall have twenty-one (21) days from the date of said written offer by the
Landlord to accept in writing the terms offered and to execute a lease or an
appropriate amendment to this Lease. If the Tenant fails to do so, then the
Tenant's right of first refusal to lease said 10,500 square feet of industrial
space shall cease and the Landlord shall be free to lease the same to another
tenant at a price and upon terms no more favorable than those offered to the
Tenant. If the proposed lease with the prospective tenant is not executed within
one hundred twenty (120) days after the notification by the Tenant that the
Tenant does not elect to lease said space (or within one hundred eighty (180)
days after the expiration of the Tenant's twenty-one day period to make said
election if the Tenant has not notified the Landlord of its acceptance or
refusal of said terms) then the Landlord must re-offer the space to the Tenant
before concluding any other proposed lease transaction covering said space. The
Tenant agrees to execute such documents as Landlord may reasonably request
evidencing that this right of first refusal has been complied with. This right
of first refusal shall expire upon the earlier of: (a) the Tenant failing to
accept within twenty-one (21) days a written offer from the Landlord pursuant to
this article; or (b) the Expiration Date of this Lease. This right of first
refusal shall not be deemed to be waived by the Tenant if the Landlord proposes
to lease said space to a prospective tenant on terms more favorable than those
previously offered to and rejected by the Tenant.
31. TENANT'S OPTION TO EXTEND LEASE.
Provided that the Tenant is not then in material default under the terms of
this lease, the Tenant shall have one (1) option to extend this lease for one
successive term of five (5) years, which shall be execisable by the Tenant
giving written notice to the Landlord not later than ninety (90) days prior to
the Expiration Date. Such extension shall be on the same terms and conditions
contained in this lease, except that there shall be no further options to
extend, and except that the Monthly Rent during the first two (2) years of the
extended term shall be fifteen percent (15%) above the Monthly Rent in the fifth
year of this Lease, and the Monthly Rent during the final three (3) years of the
extended term shall be twenty percent (20%) above the Monthly Rent during the
fifth year of this Lease.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first written above.
"TENANT"
PRECISION OPTICS CORPORATION, INC.
By: /s/ Richard E. Forkey
------------------------------
Title: CEO
---------------------------
Hereunto duly authorized
"LANDLORD"
URQUHART FAMILY LLC
By: /s/ D.L. Urquhart
------------------------------
Title: Manager
---------------------------
Hereunto duly authorized
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EXHIBIT A
FLOOR PLANS WHICH CONSTITUTE A PART OF
THE LEASE
[SEE ATTACHED FLOOR PLANS]
[DRAWING OF FLOOR PLANS]
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EXHIBIT B
IMPROVEMENTS TO BE MADE BY LANDLORD AS A PART OF
THE LEASE
The Landlord will complete the following improvements at the Landlord's
expense prior to the Scheduled Commencement Date:
1. The Landlord will replace the worn or otherwise un-useable carpet tiles
within the portions of the Premises which are leased as office space.
2. The Landlord will steam clean the carpets within the portions of the
Premises which are leased as office space (except the carpets in the lower level
classroom space which Tenant proposes to renovate into laboratory space).
3. The Landlord will erect demising walls which demise the office and
manufacturing portions of the Premises from the Landlord's remaining space
within the Building. However, if the Tenant requires that said walls contain
security measures beyond a sheet rock partition, then the Tenant shall so inform
Landlord and the added cost of such security measures shall be paid by Tenant.
4. The Landlord will install the necessary air handling and air
conditioning equipment making use to the extent possible of existing ductwork to
provide air conditioning capacity/tonnage to the first floor manufacturing
space. In doing so, the Landlord shall not be obligated to connect the air
conditioning to interior spaces constructed by Tenant, or to engineer the air
conditioning system, or to install louvers, controls, thermostats, or additional
ducts to meet the Tenant's specific internal space requirements.
All of such work to be performed by the Landlord will be performed in a
manner that is reasonably satisfactory to the Landlord and to the Tenant.
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EXHIBIT C
RULES AND REGULATIONS WHICH CONSTITUTE A PART OF
THE LEASE
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or used for any purpose
other than ingress and egress.
2. No awnings or other projections shall be attached to the outside walls
of the Building. No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Premises other
than Landlord's standard drapes. All electric ceiling fixtures hung in offices
or spaces along the perimeter of the Building must be fluorescent, of a quality,
type, design and bulb color conforming to the building standard. Neither the
interior nor exterior of any windows shall be coated or otherwise sunscreened
without written consent of Landlord.
3. No advertisement, notice or handbill shall be exhibited, distributed,
painted or affixed by any Tenant on any part of the Premises of the Building
without the prior written consent of the Landlord, which will not be
unreasonably withheld. In the event of the violation of the foregoing by any
Tenant, Landlord may remove same without any liability, and may charge the
expense incurred in such removal to the Tenant violating this rule. Interior
signs on doors and directory tables shall be inscribed, painted or affixed for
each Tenant by the Landlord at the expense of such Tenant, and shall be of a
size, color and style acceptable to the Landlord. The directory table will be
provided exclusively for the display of the name and location of Tenants only
and Landlord reserves the right to exclude any other names therefrom. Nothing
may be placed on the exterior or corridor walls or corridor doors other than
Landlord's standard lettering.
4. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into halls, passageways or other public places in the
Building shall not be covered or obstructed by any Tenant, nor shall any
bottles, parcels or other articles be placed on the windowsills.
5. The water and wash closets and other plumbing fixtures shall not be used
for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, or other substances shall be thrown therein.
6. No Tenant shall mark, paint, drill into, or in any way deface any part
of the Premises or the Building. The Tenant will not make structural or
non-structural changes which modify the exterior appearance of the Building.
7. Any structural or non-structural changes to the existing Building
involving welding are discouraged and are not to be undertaken without the prior
consent of the Landlord.
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8. No bicycles, vehicles, birds or animals of any kind shall be brought
into or kept in or about the Premises, and no cooking shall be done or permitted
by any Tenant on the Premises, except that the preparation of coffee, tea, hot
chocolate and similar items for Tenants and their employees shall be permitted,
provided power shall not exceed that amount which can be provided by a 30 amp
circuit. No Tenant shall cause or permit any unusual or objectionable odors to
be produced or permeate the Premises.
9. The office portions of the Premises shall not be used for manufacturing
or for the storage or merchandise except as such storage may be incidental to
the use of the Premises for general office purposes. No Tenant shall occupy or
permit any portion of its premises to be occupied as an office for the
manufacture or sale of liquor, narcotics, or tobacco in any form, without the
express written consent of Landlord. No Tenant shall engage or pay any employees
on the Premises except those actually working for such Tenant on the Premises
nor advertise for laborers giving an address at the Premises. The Premises shall
not be used for lodging or sleeping or for any immoral or illegal purposes.
10. No Tenant shall make, or permit to be made any unseemly or disturbing
noises or disturb or interfere with occupants of this or neighboring buildings
or premises or those having business with them, whether by the use of any
musical instrument, radio, phonograph, unusual noise, or in any other way. No
Tenant shall throw anything out of doors, windows or skylights or down the
passageways.
11. The Landlord and the Tenant will discuss lock systems and will endeavor
to come to a mutual agreement on the location and type of locks. The Tenant will
not install lock or bolt systems without the consent of the Landlord, which will
not be unreasonably withheld. All lock systems will be installed by Tenant at
Tenant's expense.
12. All removals, or the carrying in or out of any safes, freight,
furniture, or bulky matter of any description must take place during the hours
which the Landlord may reasonably determine from time to time and no removal of
said items may take place at times other than during generally accepted business
hours without the express written consent of the Landlord. The moving of safes
or other fixtures or bulky matter of any kind must be done upon previous notice
to the superintendent of the Building and under his supervision, and the persons
employed by any Tenant for such work must be acceptable to the Landlord. The
Landlord reserves the right to inspect all safes, freight or other bulky
articles to be brought into the Building and to exclude from the Building all
safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part. The
Landlord reserves the right to prescribe the weight and position of all safes,
which must be placed upon supports approved by Landlord to distribute the
weight.
13. Any persons employed by any Tenant to perform janitorial services
shall, while in the Building and outside of the Premises, be subject to and
under the control and direction of the superintendent of the Building (but not
as an agent or servant of said superintendent or of the Landlord), and Tenant
shall be responsible for all acts of such persons.
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14. All doors opening onto public corridors shall be kept closed, except
when in use for ingress and egress.
15. The requirements of Tenant will be attended to only upon application to
the Office of the Building.
16. Canvassing, soliciting and peddling in the Building are prohibited, and
each Tenant shall cooperate to prevent the same.
17. There shall not be used in any space, or in the public halls of the
Building, either by any Tenant or others, any hand trucks, except those equipped
with rubber tires and rubber side guards.
18. Landlord shall have the right, exercisable without notice and without
liability to any Tenant, to change the name and address of the Building.
19. No vending machine or machines of any description shall be installed,
maintained, or operated upon the premises without the written consent of
Landlord.
20. The Premises will be kept in a neat, clean and orderly condition.
21. Cigarette butts, soda cans, coffee cups and other litter will not be
left on the Land by Tenant's employees or invitees, and the Tenant will make
reasonable efforts to clean-up the same.
22. The Tenant and its employees, licensees and invitees, are not permitted
to smoke on or immediately adjacent to loading docks, entrances, doorways, or
walkways on or at the Building. Smoking is not permitted in the Building. The
Tenant shall provide appropriate containers for extinguishing and disposing of
cigarettes and trash at permitted smoking areas away from the Building and the
Tenant shall maintain any such smoking areas free and clear of cigarette butts
and other refuse.
23. In all cases in these Rules and Regulations in which a matter is to
conform to a building standard, then if there is no applicable building
standard, the matter is to be subject to the Landlord's prior approval, which
will not be unreasonably withheld, conditioned or delayed.
