UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): SEPTEMBER 6, 2007
CAS MEDICAL SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 0-13839 06-1123096
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
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44 EAST INDUSTRIAL ROAD, BRANFORD, CONNECTICUT 06405
(Address of principal executive offices, including zip code)
(203) 488-6056
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (SEE General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
Closing of Sale and Leaseback Transaction
On September 6, 2007, CAS Medical Systems, Inc. ("CASMED") closed the previously announced sale and leaseback of its headquarters and manufacturing facility located at 44 East Industrial Road, Branford, Connecticut (the "Property"). On June 18, 2007, CASMED entered into agreements with Davis Marcus Partners, Inc. with respect to the sale and leaseback of the Property. The purchase and sale agreement between CASMED and Davis Marcus Partners, Inc. (the "Purchase Agreement") resulted in the payment to CASMED at closing of a purchase price of $3.0 million and the sale transaction resulted in a net to CASMED of approximately $1.4 million of working capital after taxes and repayment of the remaining mortgage balance on the Property.
On September 6, 2007, CASMED entered into a Lease with DMP New Branford, LLC ("DMP") pursuant to which it is leasing back the Property for a ten (10) year initial term with the option to extend the term for two (2) additional successive periods of five (5) years, subject to certain notice and financial covenants requirements (the "Lease"). The Lease is triple net, and provides for an annual base rent in years 1-5 of $244,800, and years 6-10 of $268,800, payable monthly. In addition, CASMED is responsible for 100% of the costs of utilities, insurance, taxes and maintenance expenses, subject to certain agreed upon maintenance components regarding HVAC, parking areas and roof, which DMP has agreed to assume at its cost. CASMED is required to comply with certain financial covenants throughout the term of the Lease which covenants will require CASMED to maintain (i) at least $600,000 with a U.S. banking institution in cash or cash equivalents, which required amount shall increase by three percent (3%) per annum; and (ii) net current assets of not less than $3,600,000.
In addition, CASMED has a right of first offer to lease any additional
space or building built by DMP on the Property, subject to certain restrictions.
CASMED also has the right to require DMP to build an addition or additional
building ("Expansion Premises"), subject to certain restrictions. Upon the
delivery of any Expansion Premises, the term of the Lease will extend for a ten
(10) year term. The base rent for the Expansion Premises shall be the greater of
the then prevailing market rent or an amount equal to a return on actual costs
of construction of greater than (i) 250 basis points over the rate on ten (10)
year U.S. Treasury Notes, or (ii) eight percent (8%). Upon delivery of the
Expansion Premises, DMP would assume obligations under CASMED's existing leases
of space at 32 and 34 East Industrial Road, Branford, Connecticut, in exchange
for a payment equal to three (3) months rent and certain unamortized costs
incurred in entering into the existing leases.
The foregoing descriptions of the Purchase Agreement and the Lease do not purport to be complete and are qualified in their entirety by reference to these agreements, copies of which are filed as Exhibits 2.1 and 10.1 hereto, respectively, and incorporated herein by reference.
ITEM 9.01. EXHIBITS AND FINANCIAL STATEMENTS
(d) EXHIBITS.
2.1 Purchase and Sale Agreement between CAS Medical Systems, Inc. and Davis Marcus Partners, Inc.
10.1 Lease between CAS Medical Systems, Inc. and DMP New Branford, LLC
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAS MEDICAL SYSTEMS, INC.
Date: September 10, 2007 By: /s/ Jeffery A. Baird
------------------------------------
Jeffery A. Baird
Chief Financial Officer
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PURCHASE AND SALE AGREEMENT
between
CAS MEDICAL SYSTEMS, INC.
as Seller
and
DAVIS MARCUS PARTNERS, INC.
as Buyer
Dated: June 18, 2007
Premises:
44 East Industrial Road (a/k/a Lot 17-2)
Branford, Connecticut
TABLE OF CONTENTS
ARTICLE AND SECTION PAGE
ARTICLE I Description of Premises..........................................1
Section 1.1 Description of Premises....................................1
Section 1.2 New Lease..................................................1
ARTICLE II Purchase Price and Escrow of Deposit.............................2
Section 2.1 Purchase Price.............................................2
Section 2.2 Acceptable Funds...........................................2
Section 2.3 Escrow of Deposit..........................................2
ARTICLE III Due Diligence Period.............................................3
Section 3.1 Buyer's Investigation......................................3
Section 3.2 Confidentiality............................................4
ARTICLE IV Environmental....................................................4
Section 4.1 Environmental Release and Indemnifications.................4
Section 4.2 Hazardous Substances.......................................4
ARTICLE V Closing..........................................................5
Section 5.1 Date, Place and Time of Closing............................5
ARTICLE VI Condition of Title...............................................5
Section 6.1 Marketable Title...........................................5
Section 6.2 Title Review...............................................5
ARTICLE VII Representations and Warranties...................................6
Section 7.1 Execution and Delivery.....................................6
Section 7.2 Seller's Representations...................................6
Section 7.3 Knowledge..................................................9
Section 7.4 Premises Conveyed "AS IS"..................................9
Section 7.5 Buyer's Representations and Warranties....................10
Section 7.6 Knowledge.................................................10
ARTICLE VIII Conditions of Closing...........................................10
Section 8.1 Buyer's Conditions........................................10
Section 8.2 Knowledge of Buyer........................................11
Section 8.3 Seller's Conditions.......................................11
Section 8.4 Knowledge of Seller.......................................12
ARTICLE IX Operations Prior to the Closing.................................12
Section 9.1 Access by Buyer...........................................12
Section 9.2 Operation of the Premises.................................13
ARTICLE X Items to be Delivered at Closing................................13
Section 10.1 Seller's Items............................................13
Section 10.2 Buyer's Items.............................................14
ARTICLE XI Taxes; Apportionments...........................................15
Section 11.1 Real Estate Taxes and Assessments.........................15
Section 11.2 Conveyance Taxes; Closing Costs...........................16
ARTICLE XII Brokerage.......................................................16
Section 12.1 Identity and Indemnification..............................16
ARTICLE XIII Eminent Domain..................................................16
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Section 13.1 Buyer's Options...........................................16
ARTICLE XIV Casualty........................................................16
Section 14.1 Immaterial Damage.........................................16
Section 14.2 Material Damage...........................................17
Section 14.3 Definitions of Material and Immaterial....................17
Section 14.4 Maintenance of Insurance..................................17
ARTICLE XV Default.........................................................17
Section 15.1 Seller's Remedy...........................................17
Section 15.2 Return of the Deposit.....................................17
ARTICLE XVI Assignability...................................................18
Section 16.1 Assignment and Assumption.................................18
ARTICLE XVII Notices.........................................................18
Section 17.1 Methods and Delivery......................................18
ARTICLE XVIII Survival and Delivery of Deed...................................19
Section 18.1 Survival..................................................19
Section 18.2 Delivery of Deed..........................................19
Section 18.3 Like-Kind Exchange........................................19
ARTICLE XIX Miscellaneous...................................................19
Section 19.1 Captions..................................................19
Section 19.2 Successors and Assigns....................................19
Section 19.3 Entire Agreement; Governing Law; Counterparts; No Waiver..20
Section 19.4 Further Assurances........................................20
Section 19.5 Binding Effect............................................20
Section 19.6 Construction..............................................20
Section 19.7 Counsel Fees and Damage...................................20
Section 19.8 Saturdays, Sundays, Legal Holidays........................20
Exhibits
A - Legal Description of Land
B - Fixtures Not Included in Sale
C - Form of Lease
D - Form of Estoppel
E - Due Diligence Demand Letter
F - Permitted Exceptions
G - Seller's Environmental Reports
H - Financial Information
[exhibits omitted in accordance with Regulation S-K and will be provided to the
Commission upon request]
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") dated June 18, 2007 (the "EFFECTIVE DATE"), is made by and between CAS MEDICAL SYSTEMS, INC. ("SELLER"), a Delaware corporation with an office at 44 East Industrial Drive, Branford, Connecticut, and DAVIS MARCUS PARTNERS, INC. ("BUYER"), a Massachusetts corporation limited liability company with an address of c/o One Appleton Street, Boston, Massachusetts 02116 Attention: Jonathan G. Davis and Paul R. Marcus, and is joined in by LAWYERS TITLE INSURANCE COMPANY (the "TITLE COMPANY") in its capacity as escrow agent, with an address at 185 Asylum Street, Hartford, Connecticut 06103-3402.
AGREEMENT
In consideration of the covenants and provisions contained herein, the parties agree as follows:
ARTICLE I Description of Premises.
Section 1.1 Description of Premises. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, subject to the terms and conditions of this Agreement, the real property commonly known as 44 East Industrial Road, Branford, Connecticut and described on EXHIBIT A attached hereto (the "LAND"), together with: (i) the appurtenances thereto, including, without limitation, all easements, rights-of-way, privileges, licenses, and other rights and benefits belonging to, running with, or in any way relating to the Land; (ii) all right, title and interest of Seller in and to any land lying in the bed of any street, road or highway, opened or proposed, in front of or abutting or adjoining the Land; (iii) all buildings, structures and other improvements situated upon the Land and all fixtures, systems and facilities owned by Seller and located on the Land, other than those fixtures listed on EXHIBIT B attached hereto and made a part hereof; and (iv) all of Seller's right, title and interest, if any, in all warranties and guaranties relating to the Premises, to the extent Buyer is required to maintain the Building component which is the subject of such warranty pursuant to the New Lease defined in Section 1.2 herein; all licenses, permits and approvals relating to the Premises, and all contract rights (to the extent related to the ownership and not the business operation of the Premises by Tenant and if relating to ownership only, then only as assumed by Buyer pursuant to the terms and the conditions of this Agreement) (the "INTANGIBLE PROPERTY"). Notwithstanding the foregoing transfer of contract rights, it is understood that certain contracts which deal with the maintenance of the Property for which Seller shall continue to be obligated to perform under the "New Lease," as hereinafter defined, shall not be subject to Buyer's assumption or termination rights described in Section 3.3. Collectively, all of the items described in this Section are referred to herein as the "PREMISES."
Section 1.2 New Lease. Subject to the Closing of the sale of the Premises pursuant to this Agreement, Seller and Buyer agree to enter into a lease (the "NEW LEASE") of the entire space within the building located on the Premises (the "BUILDING") which comprises approximately 24,000 square feet on the terms and conditions contained in the form of New Lease attached hereto as EXHIBIT C and made a part hereof. The rents due under the New Lease shall begin on the date of Closing. At Closing, Seller shall execute and deliver to Buyer a tenant estoppel certificate with respect to the New Lease (the "TENANT ESTOPPEL") which Tenant Estoppel shall be in the form attached hereto as EXHIBIT D, together with such commercially reasonable changes that may be required by Buyer's mortgage lender and a subordination, non-disturbance and attornment agreement in a form to be mutually and reasonably acceptable to Seller, Buyer and Buyer's lender (the "SNDA"), provided, however, that such lender shall not be required to assume Landlord's obligation to construct the "Additional Space," defined in the New Lease, nor have any responsibility or obligation with respect to the "Existing Leases," as defined in the New Lease, if such lender becomes the owner of the Property. Buyer and Buyer's lender shall counter-execute the
SNDA and Buyer shall deliver the same to Seller at Closing in accordance with Article X hereof. In addition, Buyer and Seller shall execute a notice of lease in recordable form to be delivered at Closing ("Notice of Lease").
ARTICLE II Purchase Price and Escrow of Deposit.
Section 2.1 Purchase Price. The purchase price (the "PURCHASE PRICE") to be paid by Buyer to Seller for the Premises is THREE MILLION AND 00/100 DOLLARS ($3,000,000.00), payable in accordance with the provisions of Section 2.2 as follows:
(a) FIFTY THOUSAND AND 00/100 DOLLARS ($50,000.00) (the "INITIAL DEPOSIT") by wire transfer to the Title Company, as escrow agent (the "ESCROW AGENT") delivered on or before 5:00 p.m. on the second (2nd) business day following the date that Seller and Buyer deliver to Buyer/Escrow Agent a fully-executed Agreement. The date on which this Agreement is executed by the later to sign of Buyer or Seller shall be deemed the "Effective Date". The Deposit will be held by the Escrow Agent pursuant to the provisions of Section 2.3.
(b) ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($100,000) ("SECOND DEPOSIT") by wire transfer in same manner as above, to be delivered on or before 5:00 p.m. on the second (2nd) business day following the last day of the "Due Diligence Period," as hereinafter defined. The Initial Deposit and the Second Deposit shall hereinafter be deemed the "Deposit."
(c) The balance of the Purchase Price, as adjusted by the prorations and credits specified in Section 2.3(a) and Article XI below, paid and delivered on the Closing Date (as defined in Section 5.1).
Section 2.2 Acceptable Funds. All monies payable under this Agreement, unless otherwise specified herein, shall be paid by immediately available funds, either wired to an account designated in writing by Seller.
Section 2.3 Escrow of Deposit.
(a) The Deposit shall be delivered to the Escrow Agent. The Escrow Agent shall hold the proceeds thereof in escrow in an interest-bearing bank account (or as otherwise agreed in writing by Seller, Buyer and the Escrow Agent) until the Closing or earlier termination of this Agreement and shall pay over or apply the Deposit in accordance with the terms of this Agreement. Any interest earned on the Deposit shall automatically be deemed part of the Deposit. At the Closing, the Escrow Agent shall pay the Deposit to Seller and the full amount of the Deposit and any interest earned thereon shall be credited against the Purchase Price. If for any reason the Closing does not occur and either party makes a written demand upon the Escrow Agent for payment of the Deposit, the Escrow Agent shall give written notice to the other party of such demand. If the Escrow Agent does not receive a written objection from the other party to the proposed payment within ten (10) business days after the giving of such notice, the Escrow Agent is hereby authorized to make such payment. If the Escrow Agent does receive a written objection within such ten (10)-business day period or if for any other reason the Escrow Agent in good faith shall elect not to make such payment, the Escrow Agent shall continue to hold the Deposit until otherwise directed by written instructions from Seller and Buyer or a final judgment of a court. The Escrow Agent shall, however, have the right at any time to deposit the Deposit with a Clerk of the Superior Court for the Judicial District of New Haven, giving written notice of such deposit to Seller and Buyer. Upon such deposit the Escrow Agent shall, however, be relieved and discharged of all further obligations and responsibilities hereunder.
(b) The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their request and for their convenience, and the Escrow Agent shall not be liable to either of the parties for any act or omission on its part unless taken or suffered in bad faith, in willful disregard of this Agreement or involving gross negligence. Seller and Buyer shall jointly and severally indemnify and hold the Escrow Agent harmless from and against all costs, claims and expenses, including reasonable counsel fees, incurred in connection with performance of the Escrow Agent's duties hereunder, except with respect to actions or omissions taken or suffered by the Escrow Agent in bad faith, in willful disregard of this Agreement or involving gross negligence on its part. The Escrow Agent has acknowledged acceptance of these provisions by signing in the place indicated on the signature page of this Agreement.
(c) Escrow Agent shall not be required to defend any legal proceeding which may be instituted against it with respect to the Deposit, the Premises or the subject matter of this Agreement unless requested to do so by Buyer or Seller and is indemnified to its satisfaction against the cost and expense of such defense. Escrow Agent shall not be required to institute legal proceedings of any kind and shall have no responsibility for the genuineness or validity of any document or other item deposited with it or the collectibility of any check delivered in connection with this Agreement. Escrow Agent shall be fully protected in acting in accordance with any written instructions given to it hereunder and believed by it to have been signed by the proper parties.
(d) Escrow Agent reserves the right to resign from its duties hereunder at any time, provided that thirty (30) days' prior written notice shall be given to the other parties hereto. At the end of such thirty (30)-day period, Escrow Agent shall pay the Escrow Amount over to the new escrow agent which shall become the Escrow Agent hereunder, and the former Escrow Agent shall thereupon have not further duties hereunder.
ARTICLE III Due Diligence Period.
Section 3.1 Buyer's Investigation.
(a) The "CANCELLATION DATE" shall be forty-five (45) days after the Effective Date, AS TO WHICH DATE TIME SHALL BE OF THE ESSENCE. The period between the Effective Date and the Cancellation Date (and inclusive of the Cancellation Date) is referred to herein as the "DUE DILIGENCE PERIOD."
(b) Subject to Section 9.1, Buyer shall promptly commence and diligently pursue its investigation of the Premises and shall use diligent efforts to complete such investigation prior to the Cancellation Date. Buyer may terminate this Agreement (for any reason or no reason at all in its sole discretion) by delivering written notice to Seller on the Cancellation Date. Promptly following such termination, Buyer shall return to Seller the due diligence materials delivered to Buyer by or on behalf of Seller. Buyer shall provide Seller with copies of any final studies, reports or test results relating to the Premises obtained by or on behalf of Buyer subject to Seller's payment of its cost to obtain the same and Seller's compliance with the confidentiality requirements of such agreement. Seller agrees that Buyer shall deliver such reports without any representation or warranty concerning the accuracy, completeness, methodology of preparation thereof. If Buyer shall not terminate this Agreement by notice on or before 5:00 p.m. on the Cancellation Date, this Agreement shall remain in full force and effect.
(c) Within five (5) business days after the Effective Date, Seller shall provide to Buyer copies of the following, if any, to the extent they are in Seller's possession and relate to the Premises: (i) all surveys, plot plans and site plans; (ii) all title insurance policies and title documents; (iii) a current real estate tax bill; (iv) any environmental studies and reports with respect to the property in
possession of Seller. Subject to Section 9.1; and (v) all of the items (in
Seller's possession) which are listed in that letter from Buyer to Mr. J.
Richard Lee, Principal, OR & L Commercial, 2 Summit Place, Stamford, CT 06405
dated April 23, 2007, a copy of which is attached hereto as EXHIBIT E. Buyer
shall have the right to inspect at the offices of Seller at the Premises, to the
extent they are in Seller's possession or control and relate to the Premises:
all engineering reports and information regarding utility locations, plans and
specifications, construction warranties and guaranties. Seller expressly
disclaims any representations and warranties with respect to any and all
information (prepared by third parties) provided by Seller pursuant to this
Section, and Buyer shall have no privity with the third parties who prepared the
information.
Section 3.2 Confidentiality. Buyer shall use all proprietary
information concerning the Premises provided to Buyer by Seller, excluding
information that is available to the general public or from sources other than
Seller (collectively, the "CONFIDENTIAL INFORMATION") only for purposes of
evaluating the Premises in connection with its purchase thereof in accordance
with the terms of this Agreement (and, if the Closing occurs, in connection with
its ownership of the Premises). Notwithstanding the foregoing: (i) Buyer may
disclose the Confidential Information to its owners, legal counsel, accountants,
lenders, potential investors, regulatory authorities and similar third parties
that need to review the Confidential Information in connection with Buyer's
purchase of the Premises in accordance with the terms of this Agreement; and
(ii) Buyer may disclose the Confidential Information to the extent that such
disclosure is required by law or court order or by discovery rules in any legal
proceeding, provided Buyer shall first provide written notice thereof to Seller.
Notwithstanding the foregoing, Buyer's obligations under this Section 3.2 shall
terminate on the Closing Date if the parties consummate the sale of the
Premises; provided, however, in the event that either party terminates this
Agreement prior to the Closing Date, then Buyer's obligations under this Section
3.2 shall continue for twelve (12) months following such date of termination of
this Agreement. The provisions of this subsection shall survive the termination
of this Agreement.
ARTICLE IV Environmental.
Section 4.1 Environmental Release and Indemnifications. Buyer shall indemnify, and hold Seller harmless, from and against any and all liability, loss, suits, claims, actions, causes of action, remediation orders, proceedings, demands, costs, penalties, damages, fines and expenses, including, without limitation, attorneys' fees, consultants' fees, laboratory fees, remediation costs, and the costs and expenses of investigation and defending any claims or proceedings, resulting from, attributable, or Environmental Liability arising from or related to the release of Hazardous Substances at, on, or from the Premises that arises or results from the activities of Buyer or its employees, agents, contractors or consultants during the Due Diligence Period. The terms and provisions of this Article IV shall survive termination of this Agreement or delivery of the Deed, as applicable.
Section 4.2 Hazardous Substances. In this Agreement, "HAZARDOUS SUBSTANCES" means any hazardous or toxic waste, substance or material, pollutant or contaminant, as deemed for purposes of the Comprehensive Environmental Response, Compensation and Liability Act Of 1990 (42 U.S.C. Sections 9601 ET SEQ.), as amended (CERCLA) or the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 ET SEQ.), as amended (RCRA), or any other federal, state or local law, ordinance, rule or regulation applicable to the Premises, or any substance that is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous, or any substance which contains gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenyls, radon gas, urea formaldehyde, asbestos, lead or electromagnetic waves.
ARTICLE V Closing.
Section 5.1 Date, Place and Time of Closing. The closing (the "CLOSING") of transfer of title to the Premises pursuant to this Agreement shall occur on or before thirty (30) days after the expiration of the Due Diligence Period (the "CLOSING DATE"). TIME IS OF THE ESSENCE WITH RESPECT TO THE CLOSING DATE. The Closing shall be held at the offices of the Escrow Agent by means of a customary escrow closing arrangement commencing at 10:00 a.m.
ARTICLE VI Condition of Title.
Section 6.1 Marketable Title. At the Closing the Premises shall be conveyed by Seller to Buyer in fee simple. The Deed (as defined in Section 10.1) shall convey marketable title to the Premises, free from all encumbrances and encroachments from or on the Premises, except the items listed on EXHIBIT F, those matters approved by Buyer in accordance with Section 6.2, and such encumbrances or restrictions which do not render title unmarketable (collectively "PERMITTED ENCUMBRANCES"). The marketability of title shall be governed by the Connecticut Standards of Title. The Deed shall be in proper statutory form for recording and shall be duly executed, acknowledged and delivered by Seller at the Closing.
Section 6.2 Title Review.
(a) Buyer shall cause to be prepared and delivered to Buyer and Seller on or before the expiration of the Due Diligence Period: (i) a current commitment for title insurance or preliminary title report (the "TITLE COMMITMENT") issued by a nationally recognized title company ("TITLE COMMITMENT"), and (ii) copies of all documents of record referred to in the Title Commitment as exceptions to title to the Premises.
(b) Prior to the expiration of the Due Diligence Period, Buyer
shall give notice (a "TITLE OBJECTION NOTICE") to Seller of the existence of any
encumbrances, defects in title or matters appearing on any survey of the
Premises obtained by Buyer (the "SURVEY") which are unacceptable to Buyer and
that are not Permitted Encumbrances ("TITLE Objections"). Seller shall notify
Buyer in writing within five (5) business days following the end of the Due
Diligence Period whether Seller will attempt to cure any Title Objections
identified by Buyer. If Seller fails to deliver such notice Seller shall be
deemed to have elected not to cure such Title Objection. Seller shall have no
obligation to remove any Title Objections, except for liens or mortgages of an
ascertainable amount created by, under or through Seller ("SELLER'S LIENS"),
which Seller's Liens Seller shall cause to be released at or prior to Closing
(with Seller having the right to apply the Purchase Price or a portion thereof
for such purpose), provided, that in addition to the Seller's obligation to
remove Seller's Liens, if there is a third party attachment against the Property
which is not due in whole or in part to the acts or omissions of Buyer, its
agents, employees, contractors, licensees or subcontractors, and the amount of
the claim which is the subject of the attachment is $50,000 or less, then Seller
shall be obligated to either (i) remove the attachment if the same can be
removed by incurring costs not to exceed $50,000; (ii) post a bond sufficient to
permit a nationally recognized title company to insure over the attachment, or
(iii) delay the Closing up to sixty days in order to remove such attachment. If
Seller elects to attempt to clear the title of defects other than Seller's
Liens, then Seller shall have until the Closing to do so. If at the Closing
Seller is unable to convey title to the Premises free and clear of such
encumbrances or defects as to which Buyer has objected, Buyer shall have the
option either of accepting such title as Seller can convey or of terminating
this Agreement by giving notice of such termination to Seller, in which event
the Deposit shall be returned to Buyer and neither Buyer nor Seller shall have
any further rights or obligations hereunder, other than those that by their
terms survive the termination of this Agreement.
(c) If, at any time subsequent to the date of the Title Commitment or Survey, Buyer receives notice of any other exceptions to title arising after the date of the Title Commitment or Survey, Buyer shall provide Seller with written notice and a copy of any such exception (the "ADDITIONAL TITLE EXCEPTION") within three (3) business days following Buyer's discovery thereof. In the event that such Additional Title Exceptions render title unmarketable as described in Section 6.1 or materially interfere with the present use of the Premises and reasonable access thereto (and do not otherwise constitute Permitted Encumbrances), Buyer shall, within three (3) business days following notice to Seller of the existence of such Additional Title Exceptions, provide Seller with written notification in the form of a Title Objection Notice that such Additional Title Exceptions are unacceptable to Buyer due to the criteria above, and the same shall be deemed to be Title Objections. The rights and obligations of Seller and Buyer with respect to any Additional Title Exceptions shall be the same as those applicable to Title Objections in Section 6.2(b).
ARTICLE VII Representations and Warranties.
Section 7.1 Execution and Delivery. Each of Buyer and Seller represents and warrants to the other that the execution and delivery of this Agreement by the persons so acting on Buyer's or Seller's behalf, respectively, have been authorized by all necessary formal action of each party, and this Agreement is the legal, valid and binding obligation of each party respectively, enforceable in accordance with its terms.
Section 7.2 Seller's Representations. To induce Buyer to enter into this Agreement and to consummate the purchase of the Premises, Seller hereby makes the following representations as of the Effective Date (which shall also be true and correct as of the Closing Date):
(a) Leases. There are no leases, tenancies, licenses or other agreements or rights of occupancy for use of any portion of the Premises, except Seller's obligation to execute and deliver the New Lease at Closing.
(b) Contracts. There are no management, service, utility or other agreements with respect to or affecting the Premises, and Seller will not enter into any such agreements prior to Closing that would affect or encumber the Premises after the Closing.
(c) No Litigation. There is no action, suit or proceeding pending against or affecting Seller (with respect to the Premises) or the Premises or any portion thereof, or relating to or arising out of the ownership, management or operation of the Premises, in any court or before or by any governmental or public department, commission, board, bureau or agency or other instrumentality, that affects Seller's ability to consummate the Closing, Seller's ability to perform its obligations hereunder or the ownership or operation of the Premises; and, to Seller's knowledge, no such action, suit or proceeding has been threatened.
(d) Governmental Notices. Seller has not received any written notice of any zoning, planning, moratorium, condemnation proceeding or proceedings or agreement in the nature of eminent domain or for the dedication of any part of the Premises to any public or quasi-public agency in connection with the Premises (collectively, a "TAKING"), and no such proceeding or agreement is contemplated.
(e) No Conflicts. Seller is a corporation, duly formed, legally existing and in good standing under the laws of the State of Delaware and is duly qualified to transact business in the State of Connecticut. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (i) have been duly authorized by all necessary action on the part of Seller; (ii) do not
require governmental or other consent; (iii) will not result in the breach of any agreement to which Seller is a party or is otherwise bound; and (iv) does not require approval of a third party.
(f) Bankruptcy. None of the following have occurred with
respect to Buyer as of the Effective Date: (i) the commencement of a case under
Title 11 of the United States Code, as now constituted or hereafter amended, or
under any other applicable federal or state bankruptcy law or other similar law;
(ii) the appointment of a trustee or receiver of any property interest; (iii) an
assignment for the benefit of creditors; (iv) an attachment, execution or other
judicial seizure of a substantial property interest; (v) the taking of, failure
to take, or submission to any action indicating an inability to meet its
financial obligations as they accrue; or (vi) a dissolution or liquidation.
(g) Consents. No authorization, consent, or approval of any governmental authority (including courts) or any third party is required for the execution and delivery by Seller of this Agreement or the performance of its obligations hereunder.
(h) Non-Foreign Person. Seller is not a "foreign person" or "disregarded entity" as defined in Section 1445 of the Code; and Seller's taxpayer identification number is 06-1123096.
(i) Patriot Act. Neither Seller nor any individual (or entity
having an interest in Seller) is a person nor entity either (a) described by
Section 1 of the Executive Order (No. 13,224) Blocking Premises and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism,
66 Fed. Reg. 49,079 (September 24, 2001), or (b) is listed on the current list
of Specially Designated Nationals and Blocked Persons issued by the U.S.
Department of the Treasury, and does not engage in any dealings or transactions,
and is not otherwise associated, with any such persons or entities.
(j) No Rights to Purchase. Seller has not granted any person any right, commitment, option, right of first refusal or any other agreement, whether oral or written, with respect to the purchase, assignment or transfer of all or any portion of the Premises.
(k) Governmental Violations. Seller has not received any written notice from any federal, state or local governmental authorities alleging any violation of any building, zoning, fire, health, life safety, environmental, disability access laws with respect to the Seller or the Premises. To Seller's knowledge, Seller is in compliance with all applicable laws with respect to its business operations at the Premises and has obtained all required governmental permits and licenses to occupy the Premises and conduct its business operations and all such permits and licenses are currently in full force and effect.
(l) Liens; Corrective Notices. Seller has not received any written notice of: (a) any pending improvement liens to be made by any governmental authority with respect to the Premises; and/or (b) any requirement for the correction of any condition with respect to the Premises or of any violations or alleged violations of building, fire or safety codes or zoning ordinances, or any other applicable law, including, without limitation, the Americans with Disabilities Act of 1990, as amended with respect to the Seller or the Premises. In the event that Seller receives notice of a zoning or building code violation requiring corrective action issued after the Effective Date, Seller shall promptly notify Buyer thereof in writing.
(m) Seller's Environmental Reports. Set forth on EXHIBIT G annexed hereto is a true and complete list of all the environmental reports and test results obtained by Seller with respect to the Premises or any part thereof (the "SELLER'S ENVIRONMENTAL REPORTS"). True, correct and complete copies of Seller's Environmental Reports have been delivered to Buyer. In addition thereto, Seller has delivered or made available to Buyer (without representation or warranty, express or implied) true and complete
copies of all third party reports in its possession or control related to physical conditions affecting and/or Hazardous Substances located on, in or at the Premises.
(n) Underground Storage Tanks; Establishment. Seller has not installed or abandoned any underground storage tanks at the Premises; and to Seller's knowledge, there are not any underground storage tanks located at the Premises. Seller has not received any notice from any governmental authority or other person that the Premises or any portion thereof constitutes an "establishment" under the Connecticut Transfer Act.
(o) Remediation Activities. There is no work currently being performed at the Premises by Seller or at the direction of Seller in order to remediate or remove Hazardous Substances, (or to sample or monitor the groundwater or soil at the Premises) and, to Seller's knowledge, Seller has not received any written notice from any governmental authority or other person stating or alleging that any condition or circumstances exist at the Premises that violates any environmental law.
(p) Environmental Compliance Notices. Except to the extent expressly set forth in the Environmental Reports, Seller has not received any summons, citation, directive, letter or other communication, from the United States Environmental Protection Agency, the State of Connecticut Department of Environmental Protection or any other federal, state or municipal authorities concerning any defect, deficiency, or violation with respect to the environmental condition of the Premises. Seller has not entered into any material commitments or agreements with any governmental authorities affecting the Premises that are not a matter of public record at the registry of deeds for the Real Premises.
(q) Certificates of Occupancy. To Seller's knowledge, there are no outstanding building permits for work done at the Premises by Seller that have not been "closed out" by issuance of a corresponding certificate of occupancy for such work.
(r) Permits. Seller has delivered or made available to Buyer true and complete copies of all permits, licenses and approvals in Seller's possession or control and relating to the ownership and operation of the Premises (the "PERMITS"). To Seller's knowledge, the Permits are in full force and effect and free from material default.
(s) Insurance Notices. Seller has received no written notice or citation from any insurance company or bonding company of any defects or inadequacies in the Premises or any part thereof, which would adversely affect the insurability of the same or of any termination or threatened termination of any policy of insurance or bond.
(t) Assessments. To Seller's knowledge, except to the extent contained in any of the Permitted Encumbrances, no portion of the Premises is subject to or is affected by any special assessment, whether or not there is presently a lien thereon, and Seller has not received any written notice that such assessment has been proposed.
Section 7.3 Knowledge. As used in this Agreement or in any other agreement, document, certificate or instrument, delivered by Seller to Buyer, the phrase "to Seller's knowledge" or any similar phrase shall mean the actual, not constructive or implied, knowledge of Jeffrey A. Baird, Chief Financial Officer and Zachary Curello, Head of Facilities.
Section 7.4 Premises Conveyed "AS IS".
(a) Except as specifically set forth in this Agreement and subject to Seller's representations, warranties and agreements under the New Lease, Buyer shall accept the Premises "AS
IS" "WHERE IS". Except as specifically set forth in this Agreement, Seller has not made and is not now making, and specifically disclaims, any warranties, representations or guaranties of any kind or character, express or implied, oral or written, past, present or future, with respect to the Premises, including, but not limited to, warranties, representations or guaranties as to: (i) matters of title; (ii) environmental matters (i.e., any matter arising out of, relating to, or resulting from the existence at or release of a Hazardous Substance or with regard to protecting of the environment, human health, sanitation, or Hazardous Substances at, on, or from the Premises) relating to the Premises or any portion thereof; (iii) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water and earthquake faults and the resulting damage of past and/or future earthquakes; (iv) whether, and to the extent to which the Premises or any portion thereof is affected by any stream (surface or underground), body of water, flood prone area, flood plain, floodway or special flood hazard; (v) drainage; (vi) soil conditions, including the existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any under shoring; (vii) zoning to which the Premises or any portion thereof may be subject; (viii) the availability or sufficiency of any utilities to the Premises or any portion thereof including, without limitation, water, sewage, gas and electric; (ix) usage of adjoining property; (x) access to the Premises or any portion thereof; (xi) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, suitability, structural integrity, operation, title to, or physical or financial condition of the Premises or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Premises or any part thereof; (xii) the presence of Hazardous Substances (as defined above) in or on, under or in the vicinity of the Premises; (xiii) the condition or use of the Premises or compliance of the Premises with any or all federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws; (xiv) any other matter affecting the stability or integrity of the real property; (xv) the potential for further development of the Premises; (xvi) the existence of vested land use, zoning or building entitlements affecting the Premises; (xvii) the merchantability of the Premises or fitness that Buyer has not relied on Seller's skill or judgment to select or furnish the Premises for any particular purpose, and that Seller makes no warranty that the Premises is fit for any particular purpose; or (xiii) tax consequences.
(b) Buyer has not relied upon and will not rely upon, either directly or indirectly, any representation or warranty of Seller or any of its agents, except as specifically set forth in this Agreement or in the New Lease. Buyer represents that it is relying on its own expertise and that of Buyer's consultants in purchasing the Premises. As of the Closing Date, Buyer shall assume the risk that adverse matters, including, but not limited to, adverse physical and environmental conditions, may not have been revealed by Buyer's inspections and investigations, except as provided by the New Lease. Buyer further acknowledges and agrees that, except as specifically set forth in this Agreement and in the New Lease, there are no oral agreements, warranties or representations, collateral to or affecting the Premises by Seller, any agent of Seller or any third party. The terms and conditions of this Section shall expressly survive the Closing and not merge with the provisions of any closing documents. Buyer has fully reviewed the disclaimers and waivers set forth in this Agreement with its counsel and understands the significance and effect thereof. Buyer shall be responsible to cure and correct all violations of laws and requirements of governmental authority that have been issued by governmental authority as of the Closing Date.
Section 7.5 Buyer's Representations and Warranties. Buyer represents that as of the Effective Date (and which shall also be true and correct as of the Closing Date):
(a) None of the following have occurred with respect to Buyer
(i) the commencement of a case under Title 11 of the United States
Code, as now constituted or hereafter amended, or under any other applicable federal or state bankruptcy law or other similar law;
(ii) the appointment of a trustee or receiver of any property interest;
(iii) an assignment for the benefit of creditors;
(iv) an attachment, execution or other judicial seizure of a substantial property interest;
(v) the taking of, failure to take, or submission to any action indicating an inability to meet its financial obligations as they accrue; or
(vi) a dissolution or liquidation (the foregoing representations are made to Buyer's knowledge to the extent that any of the foregoing actions are taken by third parties and not the Buyer or any affiliate of Buyer.
(b) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (i) have been duly authorized by all necessary action on the part of Buyer; (ii) do not require governmental or other consent; (iii) will not result in the breach of any agreement to which Buyer is a party or is otherwise bound; and (iv) does not require approval of a third party.
Section 7.6 Knowledge. As used in this Agreement or in any other agreement, document, certificate or instrument, delivered by Buyer to Seller, the phrase "to Buyer's knowledge" or any similar phrase shall mean the actual, not constructive or implied, knowledge of David R. Hooke, Chief Financial Officer and Jonathan G. Davis, the Chairman of Buyer.
ARTICLE VIII Conditions of Closing.
Section 8.1 Buyer's Conditions.
(a) The obligations of Buyer under this Agreement are subject to the satisfaction at the time of the Closing of each of the following conditions (any one of which may be waived in whole or in part by Buyer at or prior to the Closing):
(i) All of the representations and warranties by Seller set forth in Section 7.2 shall be true and correct in all material respects as of the Closing Date;
(ii) Seller shall have performed, observed, and complied with all covenants, agreement and conditions required by this Agreement to be performed by Seller at or prior to the Closing;
(iii) The items to be delivered by Seller pursuant to Article 10 or the other provisions of this Agreement shall have been delivered;
(iv) At Closing, Seller shall convey to Buyer the fee simple, marketable title to the Premises, subject only to the Permitted Encumbrances;
(v) Subject to the casualty provisions set forth in Article XIV (which provisions shall control), Premises are in the same condition as they were at the end of the Inspection Period, subject to changes that (A) are caused by the acts or omissions of Buyer or its agents or affiliates;
or (B) are a result of the operation of the Property in the normal course of business since the date hereof and in accordance with the terms of this Agreement and do not, individually or in the aggregate, have a material adverse effect on the value or operation of the Property;
(vi) There shall have been no material adverse change, whether individually or in the aggregate, in the financial condition of Seller from that existing on the Effective Date; and
(vii) Buyer's mortgage lender shall have executed and delivered the SNDA in accordance with Section 1.2 hereof, and in form and substance reasonably acceptable to Buyer and Seller.
The conditions precedent set forth in this Section 8.1 are solely for the benefit of Buyer and may be waived only by the Buyer, which waiver may be granted or withheld by Buyer in its sole discretion. Without limiting and without prejudice to any of Buyer's other rights or remedies under this Agreement in the event any such failure or condition is the result of or arises out of Seller's default under this Agreement or if any condition precedent to Buyer's obligations under this Agreement has not been satisfied as of the Closing Date or waived by Buyer, then Buyer shall be entitled in its sole discretion to terminate this Agreement by giving Seller written notice to such effect, in which event the Deposit shall be paid to Buyer.
Section 8.2 Knowledge of Buyer. Buyer shall promptly give Seller notice if it discovers, prior to the Closing Date, that any representation or warranty of Seller (whether or not to the best knowledge of Seller) is inaccurate in any material respect, or if it believes that Seller has failed to deliver to Buyer any document or material which it is obligated to deliver hereunder, or if it believes that Seller has otherwise failed to perform any covenant, agreement or condition required to be performed by Seller hereunder. Seller shall have the opportunity to cure any such defect prior to the Closing. If Seller shall fail to cure any such defect and Buyer shall elect to close, Seller shall thereafter have no liability to Buyer by reason of such defect or the damage resulting therefrom.
Section 8.3 Seller's Conditions. The obligations of Seller under this Agreement are subject to the satisfaction at the time of the Closing of each of the following conditions (any one of which may be waived in whole or in part by Seller at or prior to the Closing):
(a) All of the representations and warranties by Buyer set forth in Section 7.5 shall be true and correct in all material respects as of the Closing Date.
(b) Buyer shall have performed, observed, and complied with all covenants, agreement and conditions required by this Agreement to be performed by Buyer at or prior to the Closing.
(c) The items to be delivered by Buyer pursuant to Article 10 or the other provisions of this Agreement shall have been delivered.
Section 8.4 Knowledge of Seller. Seller shall promptly give Buyer notice if it discovers, prior to the Closing Date, that any representation or warranty of Buyer (whether or not to the best knowledge of Buyer) is inaccurate in any material respect, if it believes that Buyer has failed to deliver to Seller any document or material which it is obligated to deliver hereunder, or if it believes that Buyer has otherwise failed to perform any covenant, agreement or condition required to be performed by Buyer hereunder. Buyer shall have the opportunity to cure any such defect prior to the Closing. If Buyer shall fail to cure any such defect and Seller shall elect to close, Buyer shall thereafter have no liability to Seller by reason of such defect or the damage resulting therefrom.
ARTICLE IX Operations Prior to the Closing.
Section 9.1 Access by Buyer. During the Due Diligence Period, Buyer and its agents shall, upon at least 24 hours' prior written notice, be afforded access throughout the Premises and have the right to enter upon the Premises and the building and improvements thereon, for the purposes of inspection, the obtaining of such information and data as may be necessary to Buyer, and to make such environmental studies with respect to the Premises as Buyer may desire to ascertain the condition of the Premises. Buyer shall make and cause its agents to make diligent efforts not to materially interfere with the business of Seller and its use and enjoyment of the Premises. Buyer shall restore any disturbed areas and shall indemnify, defend and hold Seller harmless from any damage caused to the Premises by, and any claims made by Tenants resulting from, Buyer or its agents. If requested by Seller, any such access on the Premises shall be accompanied by a representative of Seller. Buyer shall maintain or cause to be maintained, at Buyer's expense, a policy of commercial general liability insurance, with a combined single limit of not less than $1,000,000 per occurrence, insuring Buyer and anyone who has access to the Premises on Buyer's behalf and/or performs any of the due diligence inspections against any injuries or damages to persons or property that may result from or are related to Buyer's and/or such Buyer's agents' entry upon the Premises. Buyer's restoration and indemnification obligations under this Section 9.1 shall survive the termination of this Agreement.
Buyer, personally or through its principals, employees and authorized agents or representatives, shall be entitled to enter upon the Premises during normal business hours and to make such inspections, studies, surveys, tests, audits and analyses as Buyer deems necessary or advisable and to meet and communicate with Seller's representatives concerning the Premises, subject to the following limitations: (a) Buyer shall give Seller written or telephone notice at least one (1) business day before conducting any such inspections at the Premises, and a representative of Seller shall have the right to be present when Buyer or its representatives are on the Premises; (b) neither Buyer nor its representatives shall interfere with the use, occupancy, or enjoyment of any occupants of the Premises; and (c) Buyer will undertake any and all such activities in a manner reasonably calculated to cause the least amount of disruption to Seller's business operations at the Premises.
Subject to the prior approval of Seller, which shall not be unreasonably withheld, delayed or conditioned, Buyer and its agents may conduct such physical testing, soil and groundwater testing and sampling at the Premises as necessary to complete its environmental evaluation, each in accordance with the current environmental engineering guidelines for such testing. In connection with any such environmental testing and sampling, the Buyer agrees to provide Seller with prior written notice of the scheduling, location and nature of such environmental testing. Seller agrees to: (a) provide Buyer and its environmental consultant its environmental manifests records and reports with respect to its operations at the Premises, (b) provide information concerning Hazardous Substances and oil use and handling practices at the Premises and environmental compliance and permitting history of the Premises; and (c) make available personnel with knowledge of the Premises and Seller's operations at the Premises for interview by Buyer's environmental consultant regarding the use, history, and physical characteristics of the Premises.
Section 9.2 Operation of the Premises.
(a) Seller shall not, without the prior written consent of Buyer, materially alter the condition of the Premises prior to the Closing.
(b) Seller shall not, without Buyer's prior written consent,
(i) make any structural alterations or additions to the Premises, except as (a)
may be required by law, or (b) as may be reasonably required for the prudent
repair and maintenance of the Premises; (ii) change or attempt to change (or
consent to any change in) the zoning or other legal requirements applicable to the Premises, (iii) cancel, amend or modify in any material respect any license or permit held by Seller with respect to the Premises, or (iv) enter into any lease or occupancy agreements affecting the Premises; or sell, transfer, encumber or change the status of title to all or any portion of the Premises;
(c) Seller shall maintain the Premises in substantially their present condition until the Closing, ordinary wear and tear excepted, subject to Articles 13 and 14 herein.
ARTICLE X Items to be Delivered at Closing.
Section 10.1 Seller's Items. At the Closing, Seller shall deliver to Buyer the following:
(a) Deed. A limited warranty (the "DEED") for the Premises, duly executed and acknowledged by Seller, and in proper form for recording, together with the necessary conveyance tax forms and checks in payment of all conveyance taxes.
(b) Resolutions; Title Company Affidavits, Etc. Such resolutions and title affidavits as Buyer's title insurance company may reasonably require, including, (i) an affidavit concerning mechanics' and materialmen's liens and parties in possession; (ii) a gap indemnity agreement; and (iii) corporate resolutions or other similar instruments with respect to the status and capacity of Seller and the authority of the person to persons who are executing the various documents on behalf of Seller in connection with the sale of the Premises;
(c) Certification Statement. A certified statement, executed by Seller, confirming to Buyer which of the representations and warranties set forth in Sections 7.1 and 7.2 herein are true and correct, as if such warranties and representations were given on the Closing Date.
(d) Non-Foreign Affidavit. A completed "non-foreign affidavit", signed by Seller and meeting the requirements of Section 1445(b)(2) of the Internal Revenue Code of 1954. Seller may take alternative actions to satisfy such statute and the regulations thereunder, provided same are reasonably acceptable to Buyer's title insurance company.
(e) Records. Copies or originals, when available, of all records and documents in the possession of Seller not previously delivered to Buyer relating to the construction, ownership, use, maintenance, operation or management of the Premises, including without limitation all architectural, mechanical, engineering and other plans and specifications, operating manuals, keys, surveys, percolation, soil, topographical and traffic studies and any environmental reports.
(f) Keys. Copies of all keys in Seller's possession or control to all locks at the Premises.
(g) Other Documents. Any other documents to be delivered by Seller pursuant to any other provisions of this Agreement.
(h) Bill of Sale. An "as is" bill of sale and general assignment for Intangible Property of Seller located at, or related to, the Premises which is part of the sale. It is understood that there is no sale of personal property with respect to this Agreement.
(i) New Lease. Four (4) original counterparts of the New Lease in the form of EXHIBIT C attached hereto duly executed by Seller; two (2) original Tenant Estoppels in the form of
EXHIBIT D attached hereto duly executed by Seller; and three (3) original counterparts of the agreed-upon form of the SNDA duly executed by Seller;
(j) Assignment of Warranties. Subject to the provisions of Article I, an assignment of all unexpired contractual warranties and guaranties provided to Seller by any third parties with respect to the Improvements (together with the written consents of such third parties if required by the terms of the warranty or guaranty);
(k) Exchange Documents. All documents required to be executed delivered in connection with any Section 1031 Exchange pursuant to Section 18.3 hereof.
(l) Closing Statement. An original counterpart of the Closing Statement, duly executed by Seller.
(m) Notice of Lease. A Notice of Lease pursuant to Article I.
Section 10.2 Buyer's Items.
At the Closing, Buyer shall deliver to Seller the following:
(a) Purchase Price. The balance of the Purchase Price pursuant to Section 2.1(c).
(b) Certification Statement. A certified statement, executed by Buyer, confirming to Seller which of the representations and warranties set forth in Sections 7.5 herein are true and correct, as if such warranties and representations were given on the Closing Date.
(c) Other Documents. Any other documents to be delivered by Buyer pursuant to any other provision of this Agreement.
(d) Lease. Four (4) original counterparts of the New Lease in the form of EXHIBIT C hereto duly executed by Buyer; two (2) original counterparts of the agreed-upon form of SNDA duly executed by Buyer and Buyer's mortgage lender.
(e) Closing Statement. An original counterpart of the Closing Statement, duly executed by Buyer.
(f) Notice of Lease. A Notice of Lease pursuant to Article I, duly executed by Buyer, in recordable form.
(g) Amendment to Lease. Four (4) original counterparts of an amendment to Lease dated December 1, 2004 by and between DIV Branford, LLC, successor-in-interest to Tiffany Associates, L.L.C. of certain premises in a building known as 34 East Industrial Road ("34 Lease"), which amendment shall provide Seller, as tenant, the right to extend the 34 Lease for a five-year period, with Base Rent to increase 3% per annum and with an early termination provision to coincide with the delivery of the "Expansion Premises," as defined in the New Lease. Such amendment shall be in a reasonable form mutually acceptable to Seller and Buyer.
(h) Financial Information. A statement of the net worth and liquidity of the principals of the Buyer, as of the Closing Date, certified by such principals and the Chief Financial Officer of the Buyer, in the form attached hereto as EXHIBIT H.
ARTICLE XI Taxes; Apportionments.
Section 11.1 Real Estate Taxes and Assessments.
(a) Real estate taxes (on the basis of the uniform Fiscal Year Calculation Method) on the Premises; and all utilities consumed at the Premises shall be apportioned pro rata between Seller and Buyer on a per diem basis as of the Closing Date and thereafter assumed and paid by Buyer, subject to the terms and conditions of the New Lease.
(b) If on the Closing Date the Premises or any part thereof is affected by a governmental assessment that is payable in installments, the current installment shall be prorated on a per diem basis as of the Closing Date and Buyer shall pay any future installments.
(c) All other items of accrued or prepaid income from and expenses of, the Premises shall be prorated on an accrual basis as of the Closing Date on the basis of the most recent ascertainable amounts of or other reliable information with respect to each such item.
(d) Buyer and Seller shall cooperate to produce prior to the Closing Date a schedule of prorations to be made as of the Closing Date as complete and accurate as reasonably possible (the "CLOSING STATEMENT"), and the Closing Statement shall be the basis for adjusting the Purchase Price. Any corrections to the Closing Statement shall be made by the parties with due diligence and cooperation within ten (10) business days following the Closing Date, by prompt cash payment to the party to which there is a net amount due as a result of such correction from the other party. For purposes of all prorations provided for herein, Seller shall be responsible for all days up to and including the day immediately preceding the Closing Date, and Buyer shall be responsible for all days thereafter.
Section 11.2 Conveyance Taxes; Closing Costs. Seller shall pay all transfer and conveyance taxes and the cost of any instruments necessary to discharge any Seller's Liens and any Title Objections that are subject to discharge by Seller by the terms of this Agreement. Buyer shall pay for the cost of recording the deed and for its title insurance and survey, if any. Seller and Buyer shall share equally the Escrow Agent's charges for its escrow services in connection with this Agreement.
ARTICLE XII Brokerage.
Section 12.1 Identity and Indemnification. Each of Buyer and Seller represent and warrant to the other that it has not dealt with any broker in connection with the Premises and the transactions described herein other than O,R&L Commercial (the "BROKER"). Each party agrees to indemnify, defend and hold the other harmless from and against any and all claims, causes of action, losses, costs, expenses, damages or liabilities, including reasonable attorneys' fees and disbursements, that the other may sustain, incur or be exposed to, by reason of any claim or claims by any broker, finder or other person, other than the Broker, for fees, commissions or other compensation arising out of the transactions contemplated in this Agreement if such claim or claims are based in whole or in part on dealings, discussions or agreements with the indemnifying party. Seller shall pay the Broker a commission pursuant to a separate written agreement. The obligations and representations contained in this Section shall survive the termination of this Agreement and the Closing.
ARTICLE XIII Eminent Domain.
Section 13.1 Buyer's Options. If Seller receives notice of a Taking or proposed Taking prior to the Closing, Seller shall promptly deliver a copy of such notice to Buyer. If all or any material part of the Premises has been or is Taken prior to the Closing, or if any proceeding for such a Taking has been or is commenced prior to the Closing or if notice of the contemplated commencement thereof has been or is given to Seller and/or Buyer prior to the Closing, Buyer shall have the right, at its sole option, to terminate this Agreement by notice to Seller within five (5) business days after receipt by Buyer of written notice of the Taking or the proposed Taking. If Buyer does not terminate this Agreement, the Closing shall occur as scheduled, the Purchase Price shall be reduced by the total of all awards or damages received prior to the Closing by Seller and any party claiming under or through Seller, and Seller and any party claiming under or through Seller shall, at the Closing, assign to Buyer all right, title and interest in and to all awards or damages to which Seller or such party may have become entitled or may thereafter be entitled by reason of any exercise of the power of eminent domain or condemnation with respect to or for the Taking of the Premises or any portion thereof. As used herein, a "material" Taking shall be a Taking the result of which is that (a) the Premises can no longer be used for Buyer's intended purposes; (b) involves any portion of the parking areas, driveways or any means of egress to, or egress from, the Premises; or (c) the Premises (or any portion thereof) constitutes a non-conforming use or a non-conforming improvement.
ARTICLE XIV Casualty.
Section 14.1 Immaterial Damage. If an immaterial part of the Premises is damaged by fire or other casualty, this Agreement shall not be affected thereby and there shall be no reduction in the Purchase Price. Seller shall assign to Buyer at the Closing and Buyer shall accept an assignment of all of the claims or rights of Seller and any party claiming under or through Seller under the insurance policy or policies on the Premises. If and to the extent that Seller (or such other party) shall have received the proceeds of any such claim prior to the Closing Date, Seller shall credit Buyer on the Closing Date with the actual amount of insurance monies collected by Seller and any party claiming under or through Seller with respect to such loss (together with the deductible amount stipulated in the insurance policy). In any event, the assignment or the proceeds shall be reduced by all costs reasonably incurred by Seller as a result of the damage, including without limitation counsel fees and costs of interim protection, appraisals, repair and restoration.
If the insurance award is unavailable because it is unassignable by Seller or because Seller failed to keep the required insurance for the Premises in force at the time of the casualty, then the Purchase Price shall be decreased by either (as applicable): (a) the amount of the insurance proceeds that are payable to Seller (or the amount of such proceeds that are not assignable) plus the deductible amount, or (b) the amount of the insurance proceeds that or would have been so payable if Seller had kept the required insurance in effect plus the deductible amount.
Section 14.2 Material Damage. If all or a material part of the Premises
is damaged by fire or other casualty, Buyer may cancel this Agreement by notice
to Seller given not later than ten (10) business days after receipt of notice of
such damage and, in such event, this Agreement shall be cancelled and
terminated, neither party shall have any further rights against the other and
the Escrow Agent shall refund to Buyer the Deposit. If Buyer shall not cancel
this Agreement, the Closing shall occur as scheduled, and the provisions of
Section 14.1 herein shall control.
Section 14.3 Definitions of Material and Immaterial. A material part of the Premises shall be deemed damaged by fire or other casualty only if the aggregate restoration costs, in the reasonable
opinion of an independent architect (that is a AIA member) designated by Seller (and reasonable approved by Buyer), exceeds $200,000.00. Otherwise the damage shall be deemed immaterial.
Section 14.4 Maintenance of Insurance. Seller agrees to maintain through the Closing Date the insurance policy or policies presently in force with respect to the Premises or insurance equivalent in amount and coverage, which shall include "all risks of physical loss or damage" property insurance on a 100% replacement cost basis insuring the Premises.
ARTICLE XV Default.
Section 15.1 Seller's Remedy. If the Closing is not held by reason of Buyer's default, Seller's sole and exclusive remedy under this Agreement shall be to collect the Deposit from the Escrow Agent as liquidated damages. Seller hereby waives any right to recover the balance of the Purchase Price or any part thereof, or the right to pursue any other remedy permitted by law or equity against Buyer, including any right to collect any other damages from Buyer, or specific performance, provided that these provisions shall not be deemed to limit Buyer's obligations under any indemnity set forth herein. If Seller has performed its obligations under this Agreement (or is prepared to perform them at the Closing) and Buyer fails to purchase the Premises in accordance with the terms of this Agreement on the Closing Date, Buyer shall be deemed to be in default under this Agreement.
Section 15.2 Return of the Deposit. If Buyer exercises any right of termination granted to Buyer under this Agreement, the Escrow Agent shall promptly pay to Buyer the Deposit, unless otherwise provided under the Purchase and Sale Agreement. If the Closing is not held by reason of Seller's default, Buyer's sole and exclusive remedy is either to: (a) terminate this Agreement by written notice thereof delivered to Seller (in which case the Deposit shall promptly be returned to Buyer) and Seller shall reimburse Buyer for its reasonable out-of-pocket expenses paid or incurred to third parties (and reasonably documented) for services solely related to its due diligence investigations, the financing of the acquisition of the Premises by its mortgage lender and equity investors, counsel and its mortgage lender's counsel, (b) waive such default and consummate the transactions contemplated hereby in accordance with the terms of this Agreement, or (c) bring an action to enforce specific performance of this Agreement by Seller. If Buyer has performed its obligations under this Agreement (or is prepared to perform them at Closing) and Seller fails to sell the Premises in accordance with the terms of this Agreement on the Closing Date, Seller shall be deemed to be in default under this Agreement.
ARTICLE XVI Assignability.
Section 16.1 Assignment and Assumption. Buyer shall have the right to assign this Agreement and its rights hereunder to an affiliate of Buyer; otherwise, Seller's prior written consent is required, which consent may be withheld in Seller's sole discretion. Any permitted assignee of Buyer shall be entitled to all of the rights and powers of Buyer hereunder. If Buyer assigns this Agreement, the named Buyer and the assignee shall jointly and severally be liable for any obligations of Buyer hereunder.
ARTICLE XVII Notices.
Section 17.1 Methods and Delivery.
(a) Except as otherwise specifically provided in this Agreement, all notices, demands, requests, consents, approvals or other communications required or permitted to be given hereunder or that are given with respect to this Agreement shall be in writing and shall be deemed to have been properly given, upon receipt or refusal, when delivered in person or by overnight or similar courier
service; or the date of the confirmed facsimile transmission when delivered by a facsimile transmission (if a copy is also sent on the same day by overnight courier service; or sent by registered or certified mail, postage pre-paid, return receipt requested, addressed to Seller at 44 East Industrial Drive, Branford, Connecticut 06405 Attention: Jeffrey A. Baird, Chief Financial Officer, with a facsimile number of 203-488-9438 and to Buyer at One Appleton Street, Boston, Massachusetts 02116 Attention: Jonathan G. Davis and Paul R. Marcus, with a facsimile of 617-451-3604 or to such other address as such party shall have specified most recently by like notice.
(b) At the same time any notice is given to Buyer, copies shall be sent as provided above to Davis Marcus Partners, Inc., 200 Connecticut Avenue, Norwalk, Connecticut 06854; Attention: David P. Fiore; facsimile number 203-866-1238.
(c) At the same time any notice is given to Seller, a copy shall be sent as provided above to Wiggin and Dana LLP, One Century Tower, 265 Church Street, New Haven, CT 06510, attn: Pamela P. Millman; facsimile number 203-782-2889.
(d) Notice to the Escrow Agent shall be sent as provided above to Lawyers Title Insurance Company, 175 Capital Boulevard, Suite 100, Rocky Hill, Connecticut 06067, Attn: Denis Caron, Esq., facsimile number 860-257-1488.
ARTICLE XVIII Survival and Delivery of Deed.
Section 18.1 Survival. Except as otherwise provided in this Agreement, the representations, warranties, covenants or other obligations of Seller or Buyer set forth in this Agreement shall survive the Closing.
Section 18.2 Delivery of Deed. The delivery of the deed by Seller, and the acceptance thereof by Buyer, shall be deemed the full performance and discharge of every obligation on the part of Seller to be performed hereunder, except those obligations of Seller that are expressly stated in this Agreement to survive the Closing.
Section 18.3 Like-Kind Exchange. Seller and Buyer each hereby
acknowledge that the other (the "Exchanging Party") may now or hereafter desire
to enter into a partially or completely nontaxable exchange (a "SECTION 1031
EXCHANGE") involving the Premises under Section 1031 of the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.
In connection therewith, and notwithstanding anything herein to the contrary,
the non-Exchanging Party and (the "ACCOMMODATING Party") shall cooperate with
the Exchanging Party and shall take, and consent to the Exchanging Party taking,
any action in furtherance of effectuating a Section 1031 Exchange (including,
without limitation, any action undertaken pursuant to Revenue Procedure 2000-37,
2000-40 IRB, as may hereafter be amended or revised (the "REVENUE PROCEDURE")),
including, without limitation, (a) permitting the Exchanging Party or an
"exchange accommodation titleholder" (within the meaning of the Revenue
Procedure) ("EAT") to assign, or cause the assignment of, this Agreement and all
of the Exchanging Party's rights hereunder with respect to any or all of the
Premises to a "qualified intermediary" (as defined in Treasury Regulations
Section 1.1031(k)-1(g)(4)(iii)) (a "QI"); (b) permitting the Exchanging Party to
assign this Agreement and all of the Exchanging Party's rights and obligations
hereunder with respect to any or all of the Premises and/or to convey, transfer
or sell any or all of the Premises, to (i) an EAT; (ii) any one or more limited
liability companies ("LLCS") that are wholly-owned by an EAT; or (iii) any one
or more LLCs that are wholly-owned by the Exchanging Party and/or any affiliate
of the Exchanging Party and to thereafter permit the Exchanging Party to assign
its interest in such one or more LLCs to an EAT; and (c) pursuant to the terms
of this Agreement, having any or all of
the Premises conveyed by an EAT or any one or more of the LLCs referred to in
(b)(ii) or (b)(iii) above, and allowing for the consideration therefore to be
paid by an EAT, any such LLC or a QI; provided, however, that (1) the
Accommodating Party shall not be required to delay the Closing; (2) the
Exchanging Party shall provide whatever safeguards are reasonably requested by
the Accommodating Party, and not inconsistent with the Exchanging Party's desire
to effectuate a Section 1031 Exchange involving any of the Premises, to ensure
that all of the Exchanging Party's obligations under this Agreement shall be
satisfied in accordance with the terms thereof and (3) the Exchanging Party
shall pay all out of pocket expenses reasonably incurred by the Accommodating
Party in connection with the Accommodating Party's obligations under this
Section 17.3.
ARTICLE XIX Miscellaneous.
Section 19.1 Captions. The captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope of intent of this Agreement or any of the provisions hereof.
Section 19.2 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors and assigns.
Section 19.3 Entire Agreement; Governing Law; Counterparts; No Waiver. This Agreement (including the exhibits attached hereto) contains and constitutes the entire agreement of the parties with respect to the subject matter that it covers, shall be governed by and construed under the laws of the State of Connecticut and may not be changed orally. This Agreement may be executed in any number of counterparts, all of which evidence only one Agreement and only one of which need be produced for any purpose. A party may, in its sole discretion, waive any condition herein to consummate the Closing, but no consent or waiver, express or implied, by a party to or of a breach of any representation, covenant, condition, agreement or warranty of the other party shall be construed as a consent or waiver to or of any other breach of the same or any other representation, covenant, condition, agreement or warranty of the other party.
Section 19.4 Further Assurances. Seller and Buyer shall perform such other acts and execute, acknowledge and deliver, at or subsequent to the Closing, such other instruments, documents, and other materials as the other party hereto may reasonably request and shall be necessary in order to effect the consummation of the transactions contemplated by this Agreement.
Section 19.5 Binding Effect. Submission of this Agreement shall have no binding force and effect, nor shall it constitute an agreement to purchase or sell nor shall it confer any rights on Seller or Buyer or impose any obligations on either of them until execution and delivery of this Agreement by both parties.
Section 19.6 Construction. Each provision of this Agreement has been mutually negotiated, prepared and drafted, each party has been represented by legal counsel, and in connection with the construction of any provision hereof or deletions herefrom no consideration shall be given to the issue of which party actually prepared, drafted, requested or negotiated any provision or deletion.
Section 19.7 Counsel Fees and Damage. In the event of any litigation regarding the rights and obligations of the parties under this Agreement, the prevailing party shall be entitled to recover reasonable counsel fees, court costs and other direct litigation expenses. Neither party shall be liable for consequential or indirect damages.
Section 19.8 Saturdays, Sundays, Legal Holidays. As used in this Agreement, the term "business day" shall mean any day of the week other than a Saturday and Sunday on which banking institutions in the State of Connecticut are open for business. If the time period by which any right, option, or election provided under this Agreement must be exercised or by which any acts or payments required hereunder must be performed or paid, or by which the Closing must be held, expires on a Saturday, Sunday, legal or bank holiday, then such time period shall be automatically extended to the next regularly scheduled business day.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.
SELLER: CAS MEDICAL SYSTEMS, INC.
By: /s/ Andrew Kersey -------------------------------------- Name: Andrew Kersey Title: President and CEO |
BUYER: DAVIS MARCUS PARTNERS, INC.
By: /s/ Jonathan G. Davis -------------------------------------- Name: Jonathan G. Davis Title: C.E.O |
Escrow Terms Agreed to:
LAWYERS TITLE INSURANCE CORPORATION
By: /s/ Denis R. Caron
----------------------------------
Name: Denis R. Caron
Vice President
|
LEASE
between
DMP NEW BRANFORD, LLC, as Landlord
and
CAS MEDICAL SYSTEMS, INC, as Tenant
44 East Industrial Road
Branford, Connecticut
September 6, 2007
ARTICLE 1 GRANT..............................................................1 ARTICLE 2 TERM...............................................................2 ARTICLE 3 DELIVERY OF OCCUPANCY OF THE PREMISES..............................2 ARTICLE 4 RENT AND SECURITY..................................................5 ARTICLE 5 ADDITIONAL RENT FOR PROJECT EXPENSES...............................9 ARTICLE 6 SERVICES AND UTILITIES............................................15 ARTICLE 7 CONDUCT OF BUSINESS BY TENANT.....................................17 ARTICLE 8 REPAIR AND MAINTENANCE; ALTERATIONS AND IMPROVEMENTS..............24 ARTICLE 9 INSURANCE.........................................................28 ARTICLE 10 CASUALTY..........................................................31 ARTICLE 11 CONDEMNATION......................................................33 ARTICLE 12 ASSIGNMENT AND SUBLETTING.........................................34 ARTICLE 13 DEFAULTS AND REMEDIES.............................................37 ARTICLE 14 NONDISTURBANCE AND RIGHTS OF MORTGAGE HOLDERS.....................43 ARTICLE 15 NOTICES...........................................................45 ARTICLE 16 MISCELLANEOUS.....................................................46 ARTICLE 17 EXTENSION RIGHT...................................................49 ARTICLE 18 RIGHT OF FIRST OFFER..............................................51 ARTICLE 19 RIGHT TO EXPAND...................................................52 ARTICLE 20 LANDLORD LIEN WAIVER..............................................62 LIST OF EXHIBITS ---------------- Exhibit A Premises Exhibit B Legal Description Exhibit C-1 Building Rules and Regulations Exhibit C-2 Tenant/Contractor Rules and Regulations Exhibit D Form of Letter of Credit Exhibit E Building Addition Location Exhibit F Sample Development Budget Exhibit G Base Building Description Exhibit H Base Building and Tenant Rooftop HVAC Units |
This Lease is made and entered into as of September 6, 2007, by and between DMP NEW BRANFORD, LLC, a Massachusetts limited liability company, with its principal place of business at c/o Davis Marcus Partners, Inc., One Appleton Street, Boston, Massachusetts 02116 (the "LANDLORD") and CAS MEDICAL SYSTEMS, INC., a Delaware corporation with its principal place of business at 44 East Industrial Road, Branford, Connecticut 06405 (the "TENANT").
A. This Lease is being executed and delivered by the parties pursuant to the terms of that certain Purchase and Sale Agreement between Tenant, as seller, and Landlord, as buyer, (as defined in Section 1.1) pursuant to which Landlord has agreed to purchase the "Property" (defined in Section 1.1) from Tenant.
B. Tenant has been the sole occupant of the Property since it acquired the
"Land" (as defined in Section 1.1) and constructed the "Building" (as defined in
Section 1.1) in 1998.
ARTICLE 1 GRANT
1.1 Premises. LANDLORD, FOR AND IN CONSIDERATION OF THE RENTS HEREIN
RESERVED AND OF THE COVENANTS AND AGREEMENTS HEREIN CONTAINED ON THE PART OF
TENANT TO BE PERFORMED, HEREBY LEASES TO TENANT AND TENANT ACCEPTS FROM
LANDLORD, CERTAIN SPACE SHOWN ON EXHIBIT A ATTACHED HERETO AND MADE A PART
HEREOF, CONTAINING 24,000 RENTABLE SQUARE FEET IN AREA (THE "Premises"),
SITUATED IN AN OFFICE/INDUSTRIAL BUILDING LOCATED AT 44 EAST INDUSTRIAL ROAD,
BRANFORD, CONNECTICUT (THE "Building"). THE PREMISES, BUILDING, THE "Common
Areas" (DEFINED BELOW) AND THE LAND UPON WHICH THE SAME ARE LOCATED, WHICH IS
LEGALLY DESCRIBED IN EXHIBIT B (THE "Land"), TOGETHER WITH ALL OTHER
IMPROVEMENTS THEREON AND THEREUNDER ARE COLLECTIVELY REFERRED TO AS THE
"Property".
1.2 Common Areas. LANDLORD HEREBY GRANTS TO TENANT DURING THE TERM OF THIS LEASE, A LICENSE TO USE, IN COMMON WITH THE OTHERS ENTITLED TO SUCH USE, THE COMMON AREAS AS THEY FROM TIME TO TIME EXIST, SUBJECT TO THE RIGHTS, POWERS AND PRIVILEGES HEREIN RESERVED TO LANDLORD. THE TERM "Common Areas" AS USED HEREIN WILL INCLUDE ALL AREAS AND FACILITIES OUTSIDE THE BUILDING LOCATED ON THE PROPERTY THAT ARE PROVIDED AND DESIGNATED BY LANDLORD FOR GENERAL NON-EXCLUSIVE USE AND CONVENIENCE OF TENANT AND OTHER TENANTS OF THE PROPERTY. COMMON AREAS SHALL INCLUDE, DURING THE TERM OF THE LEASE, AS EXTENDED, BUT ARE NOT LIMITED TO THE PEDESTRIAN SIDEWALKS, LANDSCAPED AREAS, ROADWAYS, PARKING AREAS AND RIGHTS OF WAY. TENANT WILL HAVE THE EXCLUSIVE USE OF THE COMMON AREAS (SUBJECT TO LANDLORD'S RIGHTS UNDER THIS LEASE) DURING THE PERIOD THAT TENANT IS THE SOLE TENANT OF THE PROPERTY.
1.3 Parking. TENANT SHALL HAVE THE RIGHT TO USE: (A) THE PARKING SPACES LOCATED BETWEEN THE BUILDING AND THE ADJOINING PUBLIC STREET ON AN EXCLUSIVE BASIS (THE "Exclusive Parking Area"), AND (B) THE OTHER PARKING FACILITIES AT THE PROPERTY IN COMMON WITH OTHER PROPERTY TENANTS ON A NON-EXCLUSIVE BASIS. THE TOTAL NUMBER OF PARKING SPACES AT THE PROPERTY AVAILABLE TO TENANT (INCLUSIVE OF BOTH EXCLUSIVE AND NON-EXCLUSIVE SPACES) SHALL BE BASED UPON THE MINIMUM NUMBER OF PARKING SPACED REQUIRED TO HAVE BEEN PROVIDED FOR THE BUILDING UNDER THE BRANFORD ZONING REGULATIONS AT THE TIME OF THE TOWN OF BRANFORD'S APPROVAL OF THE SITE PLANS FOR THE DEVELOPMENT OF THE BUILDING. TENANT AGREES NOT TO OVERBURDEN THE PARKING FACILITIES AND AGREES TO COOPERATE WITH LANDLORD AND OTHER TENANTS IN THE USE OF PARKING FACILITIES. LANDLORD MAY DESIGNATE PARKING FACILITIES AT THE PROPERTY FOR THE HANDICAPPED, VISITORS TO THE BUILDING AND FOR OTHER TENANTS OF THE PROPERTY.
1.4 FUTURE CONSTRUCTION BY LANDLORD. Landlord agrees that it shall not construct any additions to the existing Building nor any additional free-standing building prior to the third
(3rd) anniversary of the Commencement Date. Following the third (3rd)
anniversary of the Commencement Date, there shall be no restrictions on
Landlord's right to construct any free-standing buildings at the Property.
Landlord acknowledges that any proposed addition for the existing Building shall
require Tenant's prior written consent, which shall not be unreasonably
withheld. Landlord agrees to provide written notice (the "NOTICE OF INTENT TO
BUILD") to Tenant following its decision to undertake any such new construction
together with such information as may then be available concerning the size and
design of the new improvements, but Landlord may not deliver a Notice of Intent
to Build prior to the third (3rd) anniversary of the Commencement Date
(notwithstanding the fact that Landlord may have made such decision prior to
such date and have undertaken related planning and related non-construction
activities). If Tenant delivers its "Building Expansion Notice" (as defined in
Section 19.2.1 prior to the Landlord's delivery of its Notice of Intent to
Build, then Tenant's Building Expansion Notice shall have priority
notwithstanding the fact that Landlord may have undertaken planning or related
non-construction activities prior to its delivery of its Notice of Intent to
Build.
ARTICLE 2 TERM
2.1 Lease Term.
2.1.1 COMMITMENT DATE; TERM. THE PREMISES ARE LEASED FOR A TERM (THE
"Initial Term") TO COMMENCE ON SEPTEMBER ____, 2007 THE "Commencement Date"
AND SHALL END ON THE DATE (THE "Expiration Date") THAT IS TEN (10) "Lease
Years" (AS DEFINED BELOW) AFTER THE COMMENCEMENT DATE UNLESS SOONER
TERMINATED AS HEREIN PROVIDED. IF TENANT EXERCISES ITS OPTION TO EXTEND THE
TERM PURSUANT TO SECTION 17.1, THE EXPIRATION DATE SHALL BE EXTENDED IN
ACCORDANCE WITH ARTICLE 17 HEREOF (THE INITIAL TERM HEREOF, AND AS SO
EXTENDED, THE "Term").
2.1.2 LEASE YEAR DEFINED. THE FIRST "Lease Year" SHALL BEGIN ON THE COMMENCEMENT DATE AND SHALL END ON THE LAST DAY OF THE TWELFTH (12TH) FULL CALENDAR MONTH FOLLOWING THE COMMENCEMENT DATE. EACH LEASE YEAR THEREAFTER SHALL CONSIST OF TWELVE (12) CONSECUTIVE CALENDAR MONTHS FOLLOWING THE END OF THE IMMEDIATELY PRECEDING LEASE YEAR.
2.2 Holding Over. IN THE EVENT THAT TENANT RETAINS OCCUPANCY OF THE PREMISES, OR ANY PART THEREOF, AFTER THE END OF THE TERM, TENANT'S OCCUPANCY OF THE PREMISES (OR PORTION THEREOF) SHALL BE AS A TENANT AT WILL TERMINABLE AT ANY TIME BY LANDLORD, UPON AT LEAST THIRTY (30) DAYS' NOTICE TO TENANT. TENANT SHALL PAY LANDLORD RENT FOR SUCH TIME AS TENANT REMAINS IN POSSESSION OF THE PREMISES (OR PORTION THEREOF) AT THE RATE EQUAL TO ONE HUNDRED FIFTY PERCENT (150%) FOR THE FIRST SIXTY (60) DAYS OF SUCH POSSESSION, AND THEREAFTER AT ONE HUNDRED SEVENTY-FIVE PERCENT (175%), OF THE ANNUAL BASE RENT PAYABLE DURING THE LAST MONTH OF THE LEASE TERM, PLUS ALL ADDITIONAL RENT AND OTHER SUMS DUE UNDER THIS LEASE. IN ADDITION, TENANT SHALL PAY LANDLORD FOR ALL DAMAGES SUSTAINED BY REASON OF TENANT'S RETENTION OF POSSESSION OF THE PREMISES AFTER THE END OF THE TERM AND LANDLORD'S INABILITY TO DELIVER TIMELY POSSESSION OF THE PREMISES TO A PROSPECTIVE TENANT WITHIN NINETY (90) DAYS AFTER LANDLORD NOTIFIES TENANT THAT LANDLORD REQUIRES POSSESSION OF THE PREMISES FOR A PROSPECTIVE TENANT WHO HAS SIGNED A LETTER OF INTENT WITH LANDLORD (BUT SUCH NOTICE SHALL NOT BE DELIVERED EARLIER THAN THE EXPIRATION DATE). THE PROVISIONS HEREOF DO NOT LIMIT OR RESTRICT LANDLORD'S RIGHTS OR REMEDIES UNDER THIS LEASE IN THE EVENT OF ANY HOLDING OVER BY TENANT.
ARTICLE 3 DELIVERY OF OCCUPANCY OF THE PREMISES
3.1 Tenant's Representations. TENANT REPRESENTS AND WARRANTS THAT:
3.1.1 Formation; Good Standing. Tenant is a corporation, duly formed, legally existing and in good standing under the laws of the State of Delaware and is duly qualified to transact business in the State of Connecticut. This Lease constitutes the valid and legally binding obligation of Tenant, enforceable against Tenant in accordance
with its terms. The execution and delivery of, and Tenant's performance under this Lease are within Tenant's powers and have been duly authorized by all requisite corporate action;
3.1.2 Power and Authority. Tenant has full right, power and authority and is duly authorized to enter into this Lease, to perform each of the covenants on its part to be performed hereunder and to execute and deliver, and to perform its obligations under all documents required to be executed and delivered by it pursuant to this Lease;
3.1.3 No Conflicts. Neither the execution, delivery or performance of this Lease nor compliance herewith (a) conflicts or will conflict with or results or will result in a breach of or constitutes or will constitute a default under (1) the charter documents or by-laws of Tenant, (2) to the best of Tenant's knowledge, any law or any order, writ, injunction or decree of any court or governmental authority, or (3) any agreement or instrument to which Tenant is a party or by which it is bound or (b) results in the creation or imposition of any lien, charge or encumbrance upon its property pursuant to any such agreement or instrument;
3.1.4 Consents. No authorization, consent, or approval of any governmental authority (including courts) is required for the execution and delivery by Tenant of this Lease or the performance of its obligations hereunder;
3.1.5 Pending Litigation. There are no actions, suits or proceedings pending or, to the knowledge of Tenant, threatened, against or affecting Tenant or the Property which, if determined adversely to Tenant, would adversely affect its ability to perform its obligations hereunder; and
3.1.6 Patriot Act. Neither Tenant nor any individual (or entity having
an interest in Tenant) is a person or entity either (a) described by
Section 1 of the Executive Order (No. 13,224) Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism, 66 Fed. Reg. 49,079 (September 24, 2001), or (b) is
listed on the current list of Specially Designated Nationals and Blocked
Persons issued by the U.S. Department of the Treasury, and does not engage
in any dealings or transactions, and is not otherwise associated, with any
such persons or entities.
3.1.7 Business Use. Tenant currently occupies the Premises in their entirety for its business operations which involve general office, warehouse and "light" assembly;
3.1.8 Ownership. Tenant has owned and occupied the Property since April 28, 1998 and, to Tenant's knowledge, Tenant has conducted its business operations at the Property in compliance with Applicable Laws and is currently in compliance with such Applicable Laws;
3.1.9 Construction. To Tenant's knowledge, Tenant constructed the Building and related improvements in accordance with all "Applicable Laws" (as defined in Section 7.3); and Tenant has not received any notices of violation of any Applicable Laws with respect to the Building or its business operations at the Property;
3.1.10 Permits. To Tenant's knowledge, Tenant has obtained all governmental permits and approvals required for its use occupancy and business operations at the Premises and such permits and approvals are currently in full force and effect; and
3.1.11 Building Systems. All "BUILDING SYSTEMS" (as defined in Section 8.3) are in good operating condition and to Tenant's knowledge, there is no condition at
the Property in need of repair or replacement or that constitutes a violation of any Applicable Laws.
3.2 CONDITIONS OF THE PREMISES. Landlord leases the Premises to Tenant "AS IS" "WHERE IS" AND "WITH ALL FAULTS." Landlord makes no representations or warranties whatsoever with respect to the Premises. Tenant acknowledges that it has occupied the Premises since April 28, 1998 and has had full, adequate and complete opportunity to inspect the Building and the Property, and that it is fully and completely satisfied therewith. Landlord shall not have any obligation to make any repairs, to construct any improvements or to perform any other work to the Premises, except as set forth in Sections 6.1 and 8.1 hereof. If any repairs, improvements, replacements or work should be necessary to prepare the Premises for Tenant's use and occupancy or to comply with Tenant's maintenance, repair and replacement obligations under this Lease, Tenant shall perform such additional work at its own cost and expense, and shall comply with Article 8 in doing so, except as otherwise stated herein.
3.3 LANDLORD'S REPRESENTATIONS. Landlord represents and warrants that:
3.3.1 Formation; Good Standing. Landlord is a limited liability company formed, legally existing and in good standing under the laws of the State of Massachusetts and is duly qualified to transact business in the State of Connecticut. This Lease constitutes the valid and legally binding obligation of Landlord, enforceable against Landlord in accordance with its terms. The execution and delivery of, and Landlord's performance under this Lease are within Landlord's powers and have been duly authorized by all requisite corporate action;
3.3.2 Power and Authority. Landlord has full right, power and authority and is duly authorized to enter into this Lease, to perform each of the covenants on its part to be performed hereunder and to execute and deliver, and to perform its obligations under all documents required to be executed and delivered by it pursuant to this Lease;
3.3.3 No Conflicts. Neither the execution, delivery or performance of this Lease nor compliance herewith (a) conflicts or will conflict with or results or will result in a breach of or constitutes or will constitute a default under (1) the operating agreement of Landlord, (2) to the best of Landlord's knowledge, any law or any order, writ, injunction or decree of any court or governmental authority, or (3) any agreement or instrument to which Landlord is a party or by which it is bound or (b) results in the creation or imposition of any lien, charge or encumbrance upon its property pursuant to any such agreement or instrument;
3.3.4 Consents. No authorization, consent, or approval of any governmental authority (including courts) is required for the execution and delivery by Landlord of this Lease or the performance of its obligations hereunder;
3.3.5 Pending Litigation. There are no actions, suits or proceedings pending or, to the knowledge of Landlord, threatened, against or affecting Landlord or the Property which, if determined adversely to Landlord, would adversely affect its ability to perform its obligations hereunder; and
3.3.6 Patriot Act. Neither Landlord nor any individual (or entity having an interest in Landlord) is a person or entity either (a) described by Section 1 of the Executive Order (No. 13,224) Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, 66 Fed. Reg. 49,079 (September 24, 2001), or (b) is listed on the current list of Specially Designated Nationals and Blocked Persons issued by the U.S. Department of the Treasury, and does not engage in any dealings or transactions, and is not otherwise associated, with any such persons or entities.
ARTICLE 4 RENT AND SECURITY
4.1 Annual Base Rent.
4.1.1 SCHEDULE MONTHLY INSTALLMENTS. BEGINNING WITH THE COMMENCEMENT DATE AND CONTINUING THROUGHOUT THE TERM, TENANT SHALL PAY TO OR UPON THE ORDER OF LANDLORD AN ANNUAL RENTAL (THE "Annual Base Rent") AS SET FORTH BELOW WHICH SHALL BE PAYABLE IN CONSECUTIVE MONTHLY INSTALLMENTS ON OR BEFORE THE FIRST DAY OF EACH CALENDAR MONTH IN ADVANCE IN THE MONTHLY AMOUNT SET FORTH BELOW:
PERIOD ANNUAL BASE RENT MONTHLY BASE RENT ------ ---------------- ----------------- Lease Year 1 $244,800.00 $20,400.00 Lease Year 2 $244,800.00 $20,400.00 Lease Year 3 $244,800.00 $20,400.00 Lease Year 4 $244,800.00 $20,400.00 Lease Year 5 $244,800.00 $20,400.00 Lease Year 6 $268,800.00 $22,400.00 Lease Year 7 $268,800.00 $22,400.00 Lease Year 8 $268,800.00 $22,400.00 Lease Year 9 $268,800.00 $22,400.00 Lease Year 10 $268,800.00 $22,400.00 |
4.1.2 MANNER OF PAYMENT. ALL PAYMENTS OF RENT SHALL BE MADE WITHOUT DEMAND, DEDUCTION, COUNTERCLAIM, SET-OFF, DISCOUNT OR ABATEMENT IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, EXCEPT AS OTHERWISE STATED HEREIN. IF THE COMMENCEMENT DATE SHOULD OCCUR ON A DAY OTHER THAN THE FIRST DAY OF A CALENDAR MONTH, OR THE EXPIRATION DATE SHOULD OCCUR ON A DAY OTHER THAN THE LAST DAY OF A CALENDAR MONTH, THEN THE MONTHLY INSTALLMENT OF ANNUAL BASE RENT FOR SUCH FRACTIONAL MONTH SHALL BE PRO-RATED UPON A DAILY BASIS BASED UPON A THIRTY (30)-DAY MONTH.
4.2 Additional Rent. TENANT SHALL PAY TO LANDLORD ALL CHARGES AND OTHER AMOUNTS REQUIRED UNDER THIS LEASE AND THE SAME SHALL CONSTITUTE ADDITIONAL RENT HEREUNDER (HEREIN CALLED "Additional Rent"), INCLUDING, WITHOUT LIMITATION, ANY SUMS DUE RESULTING FROM THE PROVISIONS OF ARTICLE 5 HEREOF. ALL SUCH AMOUNTS AND CHARGES SHALL BE PAYABLE TO LANDLORD AT THE PLACE WHERE THE ANNUAL BASE RENT IS PAYABLE. LANDLORD SHALL HAVE THE SAME REMEDIES FOR A DEFAULT IN THE PAYMENT OF ADDITIONAL RENT AS FOR A DEFAULT IN THE PAYMENT OF ANNUAL BASE RENT. THE TERM "Rent" AS USED IN THIS LEASE SHALL MEAN THE ANNUAL BASE RENT AND THE ADDITIONAL RENT.
4.3 Place of Payment. THE ANNUAL BASE RENT AND ALL OTHER SUMS PAYABLE TO LANDLORD UNDER THIS LEASE SHALL BE PAID TO LANDLORD AT C/O DAVIS MARCUS MANAGEMENT CORP., 200 CONNECTICUT AVENUE, NORWALK, CONNECTICUT 06854, OR AT SUCH OTHER PLACE AS LANDLORD SHALL DESIGNATE IN WRITING TO TENANT FROM TIME TO TIME.
4.4 Terms of Payment. TENANT SHALL PAY TO LANDLORD ALL ANNUAL BASE RENT AS PROVIDED IN SECTION 4.1 ABOVE AND TENANT SHALL PAY ALL ADDITIONAL RENT PAYABLE UNDER ARTICLE 5 AND ARTICLE 6 ON THE TERMS PROVIDED THEREIN. EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEDING SENTENCE AND AS MAY OTHERWISE BE EXPRESSLY PROVIDED BY THE TERMS OF THIS LEASE, TENANT SHALL PAY ALL OTHER RENT TO LANDLORD, WITHIN FIFTEEN (15) DAYS AFTER DELIVERY BY LANDLORD TO TENANT OF BILLS OR STATEMENTS THEREFOR.
4.5 Late Charges. IF TENANT SHALL FAIL TO PAY ANY RENT WITHIN FIVE (5) DAYS AFTER THE DATE SAME IS DUE AND PAYABLE OR IF ANY CHECK RECEIVED BY LANDLORD FROM TENANT SHALL
BE DISHONORED, TENANT AGREES THAT LANDLORD'S ACTUAL DAMAGES RESULTING THEREFROM ARE DIFFICULT TO FIX OR ASCERTAIN. AS A RESULT, TENANT SHALL PAY TO LANDLORD (A) AN ADMINISTRATIVE FEE EQUAL TO FIVE PERCENT (5%) ON THE AMOUNT DUE, AND (B) INTEREST ON THE AMOUNT DUE FROM ITS DUE DATE UNTIL PAID AT THE LESSER OF EIGHTEEN PERCENT (18%) PER ANNUM OR THE MAXIMUM LEGAL RATE THAT LANDLORD MAY CHARGE TENANT; PROVIDED, THAT, ON THE FIRST (1ST) OCCASION ONLY DURING EACH LEASE YEAR, NO SUCH CHARGES OR INTEREST SHALL BE PAYABLE WITH RESPECT TO ANY DELINQUENT PAYMENT IF SUCH PAYMENT IS RECEIVED BY LANDLORD WITHIN FIVE (5) DAYS FOLLOWING WRITTEN NOTICE OF SUCH FAILURE. SUCH CHARGES SHALL BE PAID TO LANDLORD TOGETHER WITH SUCH UNPAID AMOUNTS AS AN ADMINISTRATIVE FEE TO COMPENSATE LANDLORD FOR ADMINISTRATIVE EXPENSES AND ITS COST OF FUNDS. SUCH LATE PAYMENT CHARGE SHALL NOT DIMINISH OR IMPAIR ANY OTHER REMEDIES AVAILABLE TO LANDLORD.
4.6 Security Deposit.
4.6.1 Financial Covenant. Tenant covenants and agrees that it shall comply with the following financial covenants during the Term:
(a) Tenant shall maintain an unrestricted and unencumbered balance of at least $600,000.00 with a U.S. banking institution in cash and cash equivalent financial instruments ("CCE") (the "REQUIRED CCE FLOOR BALANCE") during the first Lease Year. On the first day of the second Lease Year and on the first day of each succeeding Lease Year thereafter, the Required CCE Floor Balance shall increase automatically, and without notice, to an amount equal to one hundred three percent (103%) of the Required CCE Floor Balance applicable during the immediately preceding Lease Year; and
(b) Tenant shall maintain net current assets (determined in accordance with generally accepted accounting principles ("GAAP")) of not less than $3,600,000.00 (the "REQUIRED NCA AMOUNT").
To facilitate Landlord's verification of Tenant's compliance with these financial maintenance covenants, Tenant shall deliver reasonably satisfactory evidence (the "COMPLIANCE DOCUMENTS") to Landlord of its compliance with its obligation to maintain the applicable Required CCE Floor Balance and the Required NCA Amount. During any period that Tenant is a publicly-traded U.S. Company, Tenant's compliance with the financial reporting required by Section 16.12 shall be sufficient to satisfy Tenant's obligation to deliver such Compliance Documents. During any period that Tenant is not a publicly-traded U.S. company, Tenant's delivery of financial statements in the form required by Subsection 16.12.1 hereof substantiating the current CCE balance on deposit and the value of Tenant's net current assets shall be sufficient to satisfy Tenant's obligation to deliver such Compliance Documents provided that the same are delivered to Landlord (i) within ten (10) business days following Landlord's written request therefor, and (ii) within thirty (30) days following the end of the quarter of each fiscal year during the Term, in each case together with an officer's certificate confirming Tenant's compliance with the covenants stated in Subsection 4.1.6(a) and (b) above.
Tenant shall also notify Landlord and deliver such Compliance Documents to Landlord immediately if Tenant's CCE decreases below the applicable Required CCE Floor Balance or Tenant's net current assets (determined in accordance with GAAP) decreases below the Required NCA Amount.
In addition, Tenant shall deliver the same financial information to Landlord's institutional lenders and venture partners within ten (10) days following written request therefor by such requesting party (subject to delivery to Tenant of a commercially reasonable confidentiality agreement with regard to such financing information, which requirement shall be no more often than twice in any calendar year, exclusive of any
request in connection with the sale or refinancing of the Property. If Tenant fails to deposit and maintain the "Security Deposit" (as defined below) in the amounts and in the manner stated herein, such event shall constitute an Event of Default for which Tenant shall not be entitled to any notice or cure period under Article 13.
4.6.2 Security Deposit Requirement. Landlord shall have the right to require Tenant to deliver a security deposit (the "SECURITY DEPOSIT") equal to nine (9) months of Rent payable under this Lease (based upon the rentals payable for the next succeeding Lease Year) if at any time: (a) Tenant's CCE decrease below the applicable Required CCE Floor Amount, and (b) the value of Tenant's net current assets (determined in accordance with GAAP) decreases below the Required NCA Amount. Tenant shall deliver the required Security Deposit within thirty (30) days following Landlord's written request. Tenant shall maintain the full amount of such Security Deposit during the balance of the Term and any subsequent periods required hereby. The Security Deposit shall secure the faithful performance of all terms, covenants and conditions of this Lease. Tenant's Security Deposit shall be in the form of a cash payment (a "CASH PAYMENT") or a "LETTER OF CREDIT" (as defined below).
4.6.3 Letter of Credit Requirements. Any letter of credit provided to Landlord hereunder shall be in the form of an unconditional, irrevocable letter of credit which Tenant shall maintain in full force and effect for the Term, and shall meet all of the following conditions (a "LETTER OF CREDIT"):
(a) it shall be issued for the benefit of Landlord by an "ELIGIBLE BANK" (defined below) approved by Landlord;
(b) it shall be effective on the date of this Lease and have a term of not less than one (1) year following its date of issuance and contain automatic year-to-year renewal provisions subject to the Letter of Credit issuer's obligation to notify Landlord in writing by certified or registered mail of non-renewal at least sixty (60) days prior to the expiration of the Letter of Credit;
(c) the expiry date of the Letter of Credit for the final Lease Year of the Term shall be at least ninety-five (95) days following the Expiration Date of the Lease;
(d) it shall provide for the amount thereof as set forth in Subsection 4.6.2 to be available to the Landlord in multiple drawings conditioned only upon presentation of a sight draft;
(e) it shall be assignable by Landlord to its successors, assigns and mortgagees and by any successive beneficiaries thereof at no cost to transferor or transferee (Tenant agreeing to pay such charges in connection with any transfer of the Letter of Credit), and
(f) it shall be in the form attached hereto as Exhibit E or in such form as shall be acceptable to Landlord.
An "ELIGIBLE BANK" shall mean a commercial or savings bank organized under the laws of the United States or any state thereof or the District of Columbia and having total assets in excess of One Billion and 00/100 Dollars ($1,000,000,000.00) which shall be a financial institution having a rating of not less than BBB or its equivalent by Standard and Poors Corporation and subject to a Fitch's Rating of C or better. Tenant, at its expense, shall cause the issuing bank to provide Landlord's mortgage lender with a written instrument which acknowledges the collateral assignment of the proceeds of the Letter of Credit to the Mortgagee and recognizes such Mortgagee's security interest in
the proceeds of the Letter of Credit within seven (7) days following the request of Landlord or Landlord's mortgagee therefor.
4.6.4 Substitution Upon Non-Renewal of Letter of Credit. Tenant shall deliver to Landlord either: (i) a substitute Letter of Credit that satisfies the requirements for a Letter of Credit stated in this Subsection 4.6.4, or (ii) a Security Deposit in the form of a Cash Payment in the amount specified in Subsection 4.6.2 for the applicable period not later than ten (10) days following delivery of a non-renewal notice by the Letter of Credit issuer with respect to the Letter of Credit issued to Landlord or forty-five (45) days prior to the scheduled expiration of the Letter of Credit, whichever first occurs (such date, the "RE-DELIVERY DEADLINE"). If Tenant fails to deliver the substitute Letter of Credit or Cash Payment within such ten (10)-day period, Landlord shall have the right to draw the Letter of Credit and receive the proceeds as a cash Security Deposit. Tenant agrees that notwithstanding any provision of this Lease to the contrary, its failure to furnish Landlord with the required Security Deposit either in the form of a substitute Letter of Credit or as a Cash Payment in compliance with the requirements for the initial Letter of Credit prior to the Re-Delivery Deadline shall not be subject to any rights of notice or cure under this Lease.
4.6.5 Landlord's Rights Upon Default. Upon the occurrence of any of
the Events of Default described in Article 13 hereof, after the delivery of
any default notice and the expiration of any cure periods expressly
provided by the terms of this Lease, in addition to any other right or
remedies available to Landlord under this Lease, the Security Deposit shall
become due and payable to Landlord in accordance with the terms hereof.
Tenant agrees that Landlord may, without waiving any of Landlord's other
rights and remedies under this Lease, upon the occurrence of any of the
Events of Default, apply the Security Deposit to remedy any failure by
Tenant to perform any of the terms, covenants or conditions to be performed
by Tenant under this Lease and to compensate Landlord for any damages
incurred as a result of any such default, including payment of Landlord's
expenses to construct the Leasehold Improvements and pay leasing brokerage
commissions with respect to this Lease. If Landlord uses any portion of the
Security Deposit to cure any Event of Default by Tenant hereunder, Tenant
shall forthwith replenish the Security Deposit to the original amount
within ten (10) days following written notice from Landlord in the manner
directed by Landlord in such notice. If Tenant fails to restore the full
amount of the Security Deposit within such ten (10)-day period, then the
amount of such deficiency shall be subject to the charges described in
Section 4.5 hereof. During any period that Landlord is holding the Security
Deposit in the form of cash, Landlord shall not be required to keep the
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on any such deposit.
4.6.6 Sale of Building. In the event of a sale or other transfer of
the Building (or Landlord's interest therein), Landlord shall have the
right to transfer the balance of the Security Deposit to the new owner or
transferee. Upon any such transfer by Landlord and the receipt by the
successor landlord of the Security Deposit and the assumption by the
successor landlord or all of Landlord's obligations under this Lease,
Landlord shall thereupon be released by Tenant from all liability for the
return of the Security Deposit; and Tenant agrees to look to the new
landlord for the return of such Security Deposit. If Tenant is not in
default hereunder at the end of the Term, Landlord will, within ninety-five
(95) days after the expiration or earlier termination of the Lease, return
the Security Deposit, or so much as has not been applied by Landlord, to
Tenant or the last permitted assignee of Tenant's interest hereunder at the
expiration of the Term.
4.6.7 Substitution of Letter of Credit. If Tenant initially provides the Security Deposit to Landlord in the form of a Cash Payment, it may substitute for such Cash Payment a Letter of Credit pursuant to the requirements of this Section 4.6 prior to the final six (6) months of the Term provided that no Event of Default has occurred and is
continuing after the delivery of any default notice and the expiration of any cure periods expressly provided by the terms of this Lease. In the event of such a substitution (but subject to the delivery of a Letter of Credit in conformity with the requirements of Subsection 4.6.3), Tenant shall deliver to Landlord the Letter of Credit for its prior review and approval at least seven (7) business days prior to the scheduled date of such substitution. Landlord shall return the Cash Security Deposit to Tenant not later than five (5) business days following Landlord's receipt of a Letter of Credit satisfying the requirements of this Section 4.6 in substitution of the Cash Payment.
4.6.8. Substitution of Cash Payment. Tenant may substitute a Cash Payment (payable in immediately available funds) as a Security Deposit in exchange for a Letter of Credit at any time during the Term provided that no Event of Default has occurred and is continuing. In the event of such a substitution of a Cash Payment for a Letter of Credit, Tenant shall provide Landlord with at least seven (7) business days' prior written notice of such substitution, and Landlord shall return the Letter of Credit to Tenant not later than five (5) business days following Landlord's receipt of the substituted Cash Payment.
ARTICLE 5 ADDITIONAL RENT FOR PROJECT EXPENSES
5.1 Tenant's Payment Obligations; Definitions. THE PARTIES HERETO HAVE
ENTERED INTO THIS LEASE WITH THE INTENTION THAT TENANT SHALL PAY TO LANDLORD, IN
ADDITION TO ANNUAL BASE RENT, ANY AND ALL IMPOSITIONS, TAXES, REAL ESTATE TAXES,
UTILITIES, LIENS, CHARGES OR EXPENSES OF ANY NATURE WHATSOEVER (INCLUDING BOTH
NON-CAPITAL AND CAPITAL EXPENDITURES) IN CONNECTION WITH THE MAINTENANCE, REPAIR
(INCLUDING REPLACEMENTS), AND OPERATION OF THE PREMISES, EXCEPT TO THE EXTENT
CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, ITS AGENTS,
EMPLOYEES OR CONTRACTORS AND EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY STATED IN
THIS LEASE. TENANT AGREES TO PAY AS ADDITIONAL RENT, AN AMOUNT CALCULATED AS
HEREINAFTER SET FORTH. FOR PURPOSES OF THIS ARTICLE 5, THE FOLLOWING DEFINITIONS
SHALL APPLY:
"TAX YEAR": The fiscal year of the Town of Branford or other applicable
governmental authority for real estate tax purposes or such other twelve
(12)-month period as may hereafter be duly adopted in place thereof. The first
Tax Year for purposes of this Lease shall be the period July 1, 2006 to June 30,
2007. Each Tax Year thereafter shall consist of twelve (12) consecutive calendar
months following the end of the immediately preceding Tax Year.
"TAXES": All taxes, assessments and charges of every kind and nature levied, assessed or imposed at any time by any governmental authority upon or against the Property or any improvements, fixtures and equipment of Landlord used in the operation thereof whether such taxes and assessments are general or special, ordinary or extraordinary, foreseen or unforeseen in respect of each Tax Year falling wholly or partially within the Term. Taxes shall include, without limitation, all general real property taxes and general and special assessments, charges, fees or assessments for all governmental services or purported benefits to the Property, service payments in lieu of taxes, all business privilege taxes, and any tax, fee or excise on the act of entering into this Lease or any other lease of space in the Building, or on the use or occupancy of the Building or any part thereof, or on the rent payable under any lease or in connection with the business of renting space under any lease or in connection with the business of renting space in the Building, that are now or hereafter levied or assessed against Landlord by the United States of America, the State of Connecticut, or any political subdivision, public corporation, district or other political or public entity, including reasonable legal fees, experts' and other witnesses' fees, costs and disbursements incurred in connection with proceedings to contest, determine or reduce Taxes. Taxes shall also include any other tax, fee or other excise, however described, that may be levied or assessed as a substitute for, or as an addition to, in whole or in part, any other Taxes (including, without limitation, any municipal income tax) and any license fees, tax measured or imposed upon rents, or other tax or charge upon Landlord's business of leasing the Building, whether or not now customary or in the contemplation of the parties on the date of this Lease.
Taxes shall not include: (a) franchise, transfer, gift, excise, capital stock, estate, succession and inheritance taxes, and federal and state income taxes measured by the net income of Landlord from all sources, unless due to a change in the method of taxation such tax is levied or assessed against Landlord as a substitute for, or as an addition to, in whole or in part, any other Tax that would constitute a Tax; (b) penalties or interest for late payment of Taxes; and (c) any assessment for special improvements to the Property required by the Town of Branford or the State of Connecticut that solely benefit a Building addition or new building constructed by Landlord under Article 18 or Article 19 hereof, including, without limitation, widening of public roads, installation of, or hookup to, public sewer lines, public sanitary and storm drainage systems and other public utility lines and installations. In the event that the entire amount of any substitute Tax cannot legally be paid or reimbursed to Landlord by tenants of the Building, Landlord will have the option to terminate this Lease upon ninety (90) days notice to Tenant.
In the event that Landlord constructs an addition to the Building or a new building (in either such case, the "NEW BUILDING") on the Property pursuant to either Section 1.4 or Article 19 and Tenant is the sole tenant of such New Building and the Property, then the Taxes attributable to such New Building shall be included in Common Operating Expenses under this Lease and Tenant's Common Share shall be adjusted as provided in the definition of Tenant' Common Share in determining Tenant's liability for the payment of Common Operating Expenses.
In the event that Landlord constructs a New Building and Tenant is not the sole tenant of the New Building and the Property and the Taxes attributable to the New Building are separately assessed by the Town of Branford, then the Taxes attributable to the New Building shall not be included in the Common Operating Expenses payable by Tenant under this Lease (and Tenant's Common Share shall not be adjusted to account for the increased square foot area of the improvements on the Property in determining Tenant's liability for the payment of Taxes attributable to the Building); provided, however, in such case, (i) Tenant's Common Share shall be adjusted as specified above with respect to the payment of Taxes attributable to the Land, or, if the Land is not separately assessed, then Landlord shall equitably determine and apportion the Taxes applicable to the Land among the tenants of the Property; and (ii) Tenant shall be responsible for its proportionate share of the Taxes assessed on the New Building under the terms of the lease agreement to be executed by Landlord and Tenant for the space to be leased by Tenant therein.
In the event that Landlord constructs a New Building and Tenant is not the sole tenant of the New Building and the Property and the Taxes attributable to the New Building are not separately assessed by the Town of Branford, then Landlord shall equitably determine and apportion the Taxes applicable to the New Building among the tenants of the New Building (based upon the square footage of the space leased by each such tenant in the New Building relative to the total square footage of the New Building); and the Taxes attributable to the New Building shall not be included in the Common Operating Expenses payable by Tenant under this Lease (and Tenant's Common Share shall not be adjusted to account for the increased square foot area of the improvements on the Property in determining Tenant's liability for the payment of Taxes attributable to the Building); provided, however, in such case, (i) Landlord shall equitably apportion the Taxes applicable to the Land among the tenants of the Property (based upon the square footage of the space leased by each such tenant relative to the total square footage of all buildings at the Property); and (ii) Tenant shall be responsible for its proportionate share of the Taxes assessed on the New Building under the terms of the lease agreement to be executed by Landlord and Tenant for the space to be leased by Tenant therein.
"OPERATING EXPENSES": All costs and expenses (and taxes, if any, thereon) paid or incurred on behalf of Landlord (whether directly or through independent contractors) in connection with the following matters (including any sales or other taxes thereon):
MAINTENANCE AND REPAIR OF THE (I) BUILDING'S ROOFING AND FLASHING (EXCLUDING ANY OF THE ROOF'S STRUCTURAL COMPONENTS); (II) BUILDING BASE BUILDING ROOF-TOP HVAC UNITS (AND RELATED COMPONENT EQUIPMENT) IDENTIFIED IN EXHIBIT H ATTACHED HERETO AS THE "BASE BUILDING HVAC UNITS", AND (III) THE ASPHALT PAVED PARKING AREAS AND DRIVEWAYS;
LANDSCAPING AND GROUNDS MAINTENANCE, INCLUDING LAWN MOWING, TREE PRUNING, ANNUAL FLOWER PLANTING, SNOW PLOWING AND SWEEPING OF THE PARKING LOT; AND THE MAINTENANCE AND REPAIR OF ANY EXISTING IRRIGATION SYSTEM;
THE CAPITAL COSTS INCURRED WITH RESPECT TO THE MAINTENANCE AND REPAIR
OF THE PROPERTY FOR REPAIRS, ALTERATIONS, INSTALLATIONS, IMPROVEMENTS AND
ADDITIONS PERFORMED BY LANDLORD IN ACCORDANCE WITH ITS OBLIGATIONS UNDER
SECTION 5.6.1 AND SECTION 6.1 HEREOF (SPECIFICALLY EXCLUDING THE CAPITAL
COSTS OF LANDLORD'S REPLACEMENT OBLIGATIONS AS DEFINED IN SECTION 8.1
HEREOF); AND ANY CAPITAL COSTS INCURRED BY LANDLORD TO COMPLY WITH LAWS,
REGULATIONS OR ORDERS OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL AUTHORITY,
AGENCY OR DEPARTMENT WHICH WERE ENACTED OR BECAME EFFECTIVE AFTER THE DATE
HEREOF (EXCEPT ANY SUCH LEGAL COMPLIANCE MATTERS THAT ARE TENANT'S
RESPONSIBILITY UNDER THIS LEASE WHICH SHALL AT TENANT'S SOLE COST); WHICH
CAPITAL COSTS SHALL BE AMORTIZED OVER THE USEFUL LIFE OF THE CAPITAL ITEM
AS DETERMINED IN THE REASONABLE JUDGMENT OF LANDLORD'S ACCOUNTANT IN
ACCORDANCE WITH GAAP TOGETHER WITH INTEREST, AT A RATE OF INTEREST EQUAL TO
THE "PRIME RATE" (AS DEFINED IN SECTION 5.4.2 HEREOF AS IN EFFECT FROM TIME
TO TIME DURING SUCH PERIOD) PLUS TWO AND ONE-HALF PERCENT (2.50%) PER
ANNUM, ON THE UNAMORTIZED BALANCE OF THE COST OF SUCH CAPITAL ITEMS;
a) THE PREMIUMS FOR FIRE, EXTENDED COVERAGE, LOSS OF RENTS, BOILER, MACHINERY, SPRINKLER, PUBLIC LIABILITY, PROPERTY DAMAGE, EARTHQUAKE, FLOOD, AND OTHER INSURANCE RELATIVE TO THE BUILDING AND THE PROPERTY AND THE OPERATION AND MAINTENANCE THEREOF, INCLUDING COMPREHENSIVE GENERAL LIABILITY INSURANCE AND UNREIMBURSED COSTS INCURRED BY LANDLORD THAT ARE SUBJECT TO AN INSURANCE DEDUCTIBLE (THE "Insurance Expenses");
(e) SUPPLIES, MATERIALS AND EQUIPMENT PURCHASED OR RENTED, TOTAL WAGE AND SALARY COSTS PAID TO, AND ALL CONTRACT PAYMENTS MADE ON ACCOUNT OF, ALL PERSONS TO THE EXTENT ENGAGED IN THE OPERATION, MAINTENANCE AND REPAIR OF THE PROPERTY AT OR BELOW THE LEVEL OF BUILDING MANAGER (INCLUDING THE AMOUNT OF ANY TAXES, SOCIAL SECURITY TAXES, UNEMPLOYMENT INSURANCE CONTRIBUTIONS, UNION BENEFITS) AND ANY ON-SITE EMPLOYEES OF LANDLORD'S PROPERTY MANAGEMENT AGENT;
(f) Office costs of administration, legal and accounting fees and other expenses of maintaining and auditing Property accounting records and preparing Landlord's Statements; and
(g) Fees for management services whether rendered by Landlord (or affiliate) or a third party property manager in an amount equal to three percent (3%) of the Rent in each Lease Year.
Operating Expenses shall not include: (1) all costs, fees and disbursements relating to activities for the solicitation, negotiation and execution of leases for space at the Property (including but not limited to advertising costs, leasing commissions and attorneys' fees therefor); (2) the costs of alterations to, or the decorating or the redecorating of, space at the Property leased to other tenants; (3) the costs of selling, syndicating, financing or mortgaging any of Landlord's interest in the Property; (4) rentals payable under any ground or underlying lease; (5) depreciation, interest and principal payments on mortgages and other debt costs, if any; (6) expenses incurred by Landlord for repairs or other work occasioned by fire, windstorm, or other insurable casualty or condemnation (except as stated in clause (g) above); (7) expenses incurred
by Landlord to resolve disputes, enforce or negotiate lease terms with prospective or existing tenants or in connection with any financing, sale or syndication of the Property; (8) expenses for the replacement of any item covered under warranty; (9) cost to correct any penalty or fine incurred by Landlord due to Landlord's violation of any federal, state, or local law or regulation and any interest or penalties due for late payment by Landlord of any of the Operating Expenses; (10) cost of repairs necessitated by Landlord's negligence or willful misconduct, or of correcting any latent defects or original design defects in any new building construction, materials, or equipment; (11) expenses for any item or service which Tenant pays directly to a third party or separately reimburses Landlord and expenses incurred by Landlord to the extent the same are reimbursable or reimbursed from any other tenants, occupants of the property, or third parties; (12) expenses for any item or service not provided to Tenant but exclusively to certain other tenants in the Building; (13) salaries of (i) employees above the grade of building superintendent or building manager, and (ii) that portion of employee expenses for employees whose time is not spent directly and solely in the operation of the Property; (14) Landlord's general corporate overhead and administrative expenses; (15) expenses incurred by Landlord in order to comply with Landlord's environmental obligations hereunder; (16) reserves; (17) fees paid to affiliates of Landlord to the extent that such fees exceed the customary amount charged for the services provided; and (18) capital costs paid to replace the Building's roofing and flashing (excluding the structural components of the roof which is Tenant's responsibility), the Building's base building rooftop HVAC units (and related major components) and the asphalt paved parking areas and driveways at the Property.
Notwithstanding anything in this Lease to the contrary, if (a) it is established by Landlord or Tenant that a manufacturer's and/or contractor's roof warranty or guaranty (the "ROOF WARRANTY") was issued by the manufacturer or contractor of the roof of the Building, (b) the coverage period (the "COVERAGE PERIOD") of such Roof Warranty includes any portion of the Term of this Lease, and (c) a claim arises during the Coverage Period due to the need for maintenance, repair or replacement of the Building roof or roofing by Landlord that is Landlord's responsibility under the terms of this Lease and the expense of which work would be covered by the terms of the Roof Warranty (a "WARRANTY CLAIM") but Landlord is not able to make such claim under the Roof Warranty due to the fact that such Roof Warranty has not been delivered and assigned to Landlord by Tenant in compliance with the requirements of the Roof Warranty, then all expenses incurred by Landlord with respect thereto shall be included within the definition of Operating Expenses and payable by Tenant as a Building Operating Expense under Section 5.4 hereof.
"BUILDING OPERATING EXPENSES": Shall mean all Operating Expenses which relate to the Building, as determined by Landlord in its reasonable judgment.
"COMMON OPERATING EXPENSES": Shall mean the Taxes, Insurance Expenses and all Operating Expenses which relate to the Land, the Common Areas and any other portions of the Property, exclusive of the Building, as determined by Landlord in its reasonable judgment.
"TENANT'S BUILDING SHARE": Tenant's Building Share shall be a fraction, the numerator of which shall be the rentable area of the Premises and the denominator of which shall be the rentable area of the Building. On the Commencement Date, the Tenant's Building Share is one hundred percent (100%). The Tenant's Building Share shall be recalculated from time to time in the event that there shall be a change in the rentable area of either the Premises or the Building.
"TENANT'S COMMON SHARE": Shall be a fraction, the numerator of which is the rentable area of the Premises and the denominator of which shall be the rentable area of all buildings located on the Property. On the Commencement Date, the Building is the only building on the Property and the Tenant's Property Share is one hundred percent (100%). The Tenant's Property Share shall be recalculated from time to time in the event that there shall be a change in the rentable area of the Premises, the Building or the total rentable square footage of all buildings located on the Property.
"LANDLORD'S STATEMENT": An instrument containing a computation of any Additional Rent due pursuant to the provisions of this Article 5 together with a reasonably detailed breakdown, by category, of actual Operating Expenses for such time period.
"TRANSITION EVENT": Shall occur if Landlord enters into a lease with any person, except the Tenant named in this Lease, with respect to any building located at the Property. If such lease entails the construction of any new building or improvements for such tenant's occupancy, then the Transition Event shall not occur until Landlord's completion of such construction and the commencement of the lease term of such lease.
5.2 Payment of Additional Rent.
5.2.1 BUILDING OPERATING EXPENSES. TENANT SHALL PAY TENANT'S BUILDING
SHARE OF BUILDING OPERATING EXPENSES MONTHLY IN ADVANCE BEGINNING ON THE
COMMENCEMENT DATE AND CONTINUING ON THE FIRST DAY OF EACH CALENDAR MONTH
THROUGHOUT THE TERM. LANDLORD MAY REQUIRE THAT TENANT PAY TENANT'S BUILDING
SHARE OF BUILDING OPERATING EXPENSES BASED ON LANDLORD'S WRITTEN ESTIMATE
THEREOF DELIVERED TO TENANT FROM TIME TO TIME, AND UPON TENANT'S RECEIPT OF
ANY SUCH NOTICE FROM LANDLORD, THE AMOUNT OF SUCH MONTHLY INSTALLMENT
PAYMENTS SHALL CHANGE CONSISTENT WITH LANDLORD'S WRITTEN ESTIMATE. WITHIN A
REASONABLE TIME AFTER THE END OF EACH CALENDAR YEAR, LANDLORD SHALL FURNISH
TO TENANT A NOTICE AS TO WHETHER THE ESTIMATED PAYMENTS PAID BY TENANT WERE
MORE OR LESS THAN ACTUAL BUILDING OPERATING EXPENSES. WITHIN FIFTEEN (15)
DAYS FOLLOWING DELIVERY OF A LANDLORD'S STATEMENT, TENANT SHALL PAY TO
LANDLORD THE AMOUNT OF ANY UNDERPAYMENT OF BUILDING OPERATING EXPENSES. IN
THE EVENT THAT TENANT'S PAYMENTS EXCEED ITS LIABILITY FOR BUILDING
OPERATING EXPENSES, ANY SUCH OVERPAYMENT SHALL BE CREDITED AGAINST THE
MONTHLY INSTALLMENTS THAT ARE NEXT DUE AND PAYABLE BY TENANT UNDER THIS
SECTION UNTIL SUCH AMOUNT SHALL HAVE BEEN REFUNDED TO TENANT IN FULL. ANY
EXCESS PAYMENTS MADE BY TENANT DURING THE TERM THAT HAVE NOT BEEN SO
APPLIED AND OUTSTANDING AT THE END OF THE TERM SHALL BE PAID TO TENANT
PROMPTLY FOLLOWING LANDLORD'S FINAL ACCOUNTING FOR THE FINAL CALENDAR YEAR
OF THE TERM. ANY DELAY OR FAILURE OF LANDLORD IN BILLING ANY ADDITIONAL
RENT AS PROVIDED HEREIN SHALL NOT CONSTITUTE A WAIVER OF OR IN ANY WAY
IMPAIR THE CONTINUING OBLIGATION OF TENANT TO PAY SUCH RENT ADJUSTMENTS
HEREUNDER.
5.2.2 Common Operating Expenses. Tenant shall pay Tenant's Common
Share of Common Operating Expenses monthly in advance beginning on the
Commencement Date and continuing on the first day of each calendar month
throughout the Term. Landlord may require that Tenant pay Tenant's Common
Share of Common Operating Expenses based on Landlord's written estimate
thereof delivered to Tenant from time to time, and upon Tenant's receipt of
any such notice from Landlord, the amount of such monthly installment
payments shall change consistent with landlord's written estimate. Within a
reasonable time after the end of each calendar year, Landlord shall furnish
to Tenant a notice as to whether the estimated payments paid by Tenant were
more or less than actually Common Operating Expenses. Within fifteen (15)
days following delivery of a Landlord's Statement, together with any
reasonable supporting documentation including copies of tax bills, Tenant
shall pay to Landlord the amount of any underpayment of Common Operating
Expenses. In the event that Tenant's payments exceed its liability for
Common Operating Expenses, any such overpayment shall be credited against
the monthly installments that are next due and payable by Tenant under this
Section until such amount shall have been refunded to Tenant in full. Any
excess payments made by Tenant during the Term that have not been so
applied and outstanding at the end of the Term shall be paid to Tenant
promptly following Landlord's final accounting for the final calendar year
of the Term. Any delay or failure of Landlord in billing any Additional
Rent as provided herein shall not constitute a waiver of
or in any way impair the continuing obligation of Tenant to pay such rent adjustments hereunder.
5.3 Utilities. TENANT, AT ITS COST AND EXPENSE, SHALL CONTRACT DIRECTLY WITH THE APPLICABLE UTILITY COMPANIES FOR ALL UTILITIES SEPARATELY SERVING THE PREMISES, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, HEAT, AIR CONDITIONING, TELEPHONE, WATER GAS AND ELECTRICITY AND SHALL EXECUTE ALL AGREEMENTS AND PAY ALL UTILITY DEPOSITS NECESSARY TO OBTAIN THE UTILITY SERVICE IN TENANT'S NAME AND, IN THE CASE OF ELECTRICITY, TO CAUSE THE ELECTRIC UTILITY TO INSTALL THE FACILITIES NECESSARY TO BRING ELECTRIC SERVICE TO THE PREMISES. TENANT AGREES TO PAY ALL CHARGES FOR UTILITIES CONSUMED ON OR AFTER THE COMMENCEMENT DATE AS AND WHEN DUE. LANDLORD SHALL HAVE NO OBLIGATION TO PROVIDE UTILITIES OR EQUIPMENT OTHER THAN THE UTILITIES AND EQUIPMENT WHICH EXIST WITHIN THE PREMISES AS OF THE COMMENCEMENT DATE OF THIS LEASE, EXCEPT AS MAY BE REQUIRED TO PERFORM LANDLORD'S REPLACEMENT OBLIGATIONS. IN THE EVENT TENANT REQUIRES ADDITIONAL UTILITIES OR EQUIPMENT, THE INSTALLATION AND MAINTENANCE THEREOF SHALL BE TENANT'S SOLE EXPENSE AND OBLIGATION, PROVIDED THAT SUCH INSTALLATION SHALL BE SUBJECT TO THE PRIOR WRITTEN CONSENT OF THE LANDLORD. THERE SHALL BE NO ABATEMENT OF RENT AND LANDLORD SHALL NOT BE LIABLE IN ANY RESPECT WHATSOEVER FOR THE INADEQUACY, STOPPAGE, INTERRUPTION, OR DISCONTINUANCE OF ANY UTILITY OR SERVICE DUE TO ANY "FORCE MAJEURE" (AS DEFINED IN SECTION 16.16 HEREOF) OR OTHER CAUSE BEYOND LANDLORD'S CONTROL.
5.4 Landlord's Statements and Tenant's Inspection Rights.
5.4.1 LANDLORD'S STATEMENTS. LANDLORD WILL DELIVER LANDLORD'S STATEMENTS TO TENANT DURING THE TERM, BUT LANDLORD'S DELAY OR FAILURE TO RENDER LANDLORD'S STATEMENT WITH RESPECT TO ANY BUILDING OPERATING EXPENSES OR COMMON OPERATING EXPENSES BEYOND A DATE SPECIFIED HEREIN SHALL NOT PREJUDICE LANDLORD'S RIGHT TO RENDER A LANDLORD'S STATEMENT WITH RESPECT TO THE BUILDING OPERATING EXPENSES AND THE COMMON OPERATING EXPENSES OR ANY SUBSEQUENT BUILDING OPERATING EXPENSES AND COMMON OPERATING EXPENSES. THE OBLIGATIONS OF LANDLORD AND TENANT UNDER THE PROVISIONS OF THIS ARTICLE WITH RESPECT TO ANY ADDITIONAL RENT INCURRED DURING THE TERM SHALL SURVIVE THE EXPIRATION OR ANY SOONER TERMINATION OF THE TERM. IF LANDLORD FAILS TO GIVE TENANT A STATEMENT OF PROJECTED BUILDING OPERATING EXPENSES AND COMMON OPERATING EXPENSES PRIOR TO THE COMMENCEMENT OF ANY CALENDAR YEAR, TENANT SHALL CONTINUE TO PAY BUILDING OPERATING EXPENSES AND COMMON OPERATING EXPENSES IN ACCORDANCE WITH THE PREVIOUS STATEMENT, UNTIL TENANT RECEIVES A NEW STATEMENT FROM LANDLORD.
5.4.2 TENANT RIGHT TO AUDIT. DURING THE SIXTY (60)-DAY PERIOD AFTER RECEIPT OF ANY LANDLORD'S STATEMENT (THE "Review Period"), TENANT MAY INSPECT AND AUDIT LANDLORD'S RECORDS RELEVANT TO THE COST AND EXPENSE ITEMS REFLECTED IN SUCH LANDLORD'S STATEMENT AT A REASONABLE TIME MUTUALLY AGREEABLE TO LANDLORD AND TENANT DURING LANDLORD'S USUAL BUSINESS HOURS. EACH LANDLORD'S STATEMENT SHALL BE CONCLUSIVE AND BINDING UPON TENANT UNLESS WITHIN NINETY (90) DAYS AFTER RECEIPT OF SUCH LANDLORD'S STATEMENT TENANT SHALL NOTIFY LANDLORD THAT IT DISPUTES THE CORRECTNESS OF LANDLORD'S STATEMENT, SPECIFYING THE RESPECTS IN WHICH LANDLORD'S STATEMENT IS CLAIMED TO BE INCORRECT. IF, AFTER SUCH INSPECTION, TENANT DISPUTES THE AMOUNT OF BUILDING OPERATING EXPENSES OR COMMON OPERATING EXPENSES PAYABLE BY UNDER THIS ARTICLE 5, TENANT SHALL BE ENTITLED TO RETAIN AN INDEPENDENT COMPANY OR CERTIFIED PUBLIC ACCOUNTANT REASONABLY ACCEPTABLE TO LANDLORD TO REVIEW LANDLORD'S RECORDS TO DETERMINE THE PROPER AMOUNT OF SUCH ADDITIONAL RENT. IF SUCH AUDIT OR REVIEW REVEALS THAT LANDLORD HAS OVERCHARGED TENANT, THEN WITHIN FIFTEEN (15) DAYS AFTER THE RESULTS OF SUCH AUDIT ARE MADE AVAILABLE TO LANDLORD, LANDLORD SHALL REIMBURSE TENANT THE AMOUNT OF SUCH OVERCHARGE PLUS INTEREST AT THE REFERENCE OR PRIME RATE IN EFFECT FROM TIME TO TIME AT CITIBANK, OR ITS SUCCESSOR (AND, IN THE ABSENCE THEREOF, AT THE PRIME RATE PUBLISHED IN THE WALL STREET
JOURNAL), FROM THE DATE OF OVERPAYMENT (THE "Prime Rate"). IF THE AUDIT
REVEALS THAT TENANT WAS UNDERCHARGED, THEN WITHIN FIFTEEN (15) DAYS AFTER
THE RESULTS OF THE AUDIT ARE MADE AVAILABLE TO TENANT, TENANT SHALL
REIMBURSE LANDLORD THE AMOUNT OF SUCH UNDERCHARGE PLUS INTEREST THEREON AT
THE PRIME RATE. IF LANDLORD DESIRES TO CONTEST SUCH AUDIT RESULTS, LANDLORD
MAY DO SO BY SUBMITTING THE RESULTS OF THE AUDIT TO ARBITRATION PURSUANT TO
SECTION 13.8 OF THE LEASE WITHIN SIXTY (60) DAYS OF RECEIPT OF THE RESULTS
OF THE AUDIT, AND THE ARBITRATION SHALL BE FINAL AND BINDING UPON LANDLORD
AND TENANT. TENANT AGREES TO PAY THE COST OF SUCH AUDIT, PROVIDED THAT, IF
THE AUDIT REVEALS THAT LANDLORD'S DETERMINATION OF SUCH ADDITIONAL RENT AS
SET FORTH IN ANY STATEMENT SENT TO TENANT WAS IN ERROR IN LANDLORD'S FAVOR
BY MORE THAN FIVE PERCENT (5%), LANDLORD SHALL PAY THE REASONABLE COST OF
SUCH AUDIT. PENDING THE DETERMINATION OF SUCH DISPUTE AS HEREINAFTER
PROVIDED, TENANT SHALL PAY ADDITIONAL RENT IN ACCORDANCE WITH THE
APPLICABLE LANDLORD'S STATEMENT, AND SUCH PAYMENT SHALL BE WITHOUT
PREJUDICE TO TENANT'S POSITION. ALL INSPECTIONS AND AUDITS OF LANDLORD'S
BOOKS AND RECORDS AND ANY ARBITRATION SHALL BE SUBJECT TO A CONFIDENTIALITY
AGREEMENT REASONABLY ACCEPTABLE TO LANDLORD.
5.5 Additional Rent Adjustments. IF THE TERM SHALL EXPIRE ON A DATE OTHER
THAN DECEMBER 31ST, ANY ADDITIONAL RENT FOR THE LEASE YEAR IN WHICH THE
EXPIRATION DATE SHALL OCCUR SHALL BE APPORTIONED (BASED UPON THE IMMEDIATELY
PRECEDING TWELVE (12)-MONTH PERIOD) IN THAT PERCENTAGE WHICH THE NUMBER OF DAYS
IN THE PERIOD FROM JANUARY 1ST OF SUCH LEASE YEAR TO SUCH DATE OF EXPIRATION,
BOTH INCLUSIVE, SHALL BEAR TO THE TOTAL NUMBER OF DAYS IN THE CALENDAR YEAR IN
WHICH SUCH EXPIRATION OCCURS.
5.6 COMMON OPERATING EXPENSES FOLLOWING TRANSITION DATE.
5.6.1 Landlord's Additional Services. Upon the occurrence of a Transition Event, Landlord shall provide the following services to the Building under Section 6.1 hereof (and Tenant shall cease providing such services and co-operate with Landlord and its contractors with respect to the transition of such service providers): (a) repair and maintenance (but not replacement) of (a) the exterior walls (excluding the exterior windows, doors and related hardware) and (b) the storm water system. Notwithstanding the agreement of the parties herein with respect to Landlord's services with respect to the Building, Landlord acknowledges that Landlord's obligations with respect to any New Building shall also include the maintenance, repair and replacement of the following structural components of the New Building: (i) footings and foundation, (ii) structural columns and interior bearing walls, (iii) exterior walls (excluding doors and windows), and (iv) the roof structure (excluding the roofing membrane).
5.6.2 Additional Operating Expenses. Upon the occurrence of a Transition Event, the following costs and expenses shall be included within the definition of Operating Expenses and subject to payment by Tenant as Additional Rent:
(a) MAINTENANCE AND REPAIR (EXCLUDING REPLACEMENTS) OF (I) EXTERIOR WALLS (EXCLUDING EXTERIOR WINDOWS AND DOORS AND RELATED HARDWARE) OF THE BUILDING; AND (II) THE PROPERTY'S STORM WATER SYSTEM;
(b) Fees for management services whether rendered by Landlord (or affiliate) or a third-party property manager in an amount equal to three percent (3%) of the Rent in each Lease Year.
ARTICLE 6 SERVICES AND UTILITIES
6.1 Services. LANDLORD SHALL PROVIDE THE FOLLOWING SERVICES TO THE BUILDING
AND PROPERTY (SUBJECT TO TENANT'S REIMBURSEMENT AND PAYMENT OBLIGATIONS THEREFOR
IN ACCORDANCE WITH THE OPERATION OF ARTICLE 5 HEREOF) AND SUBJECT TO TENANT'S
COMPLETION OF THE "Tenant Roof Repairs" (AS DEFINED IN SECTION 8.2.5 HEREOF) AND
THE "Tenant Paving Repairs" (AS DEFINED IN SECTION 8.2.6 HEREOF):
(a) MAINTENANCE AND REPAIR (INCLUDING REPLACEMENTS) OF THE BUILDING'S EXISTING BASE BUILDING ROOF-TOP HVAC UNITS (AND RELATED MAJOR COMPONENT EQUIPMENT) IDENTIFIED IN EXHIBIT H ATTACHED HERETO AS THE "BASE BUILDING HVAC UNITS", BUT EXCLUDING ANY SPECIALTY UNITS THAT ARE USED IN TENANT'S ASSEMBLY OR MANUFACTURING PROCESSES;
(b) MAINTENANCE AND REPAIR (INCLUDING REPLACEMENTS) OF (I) THE BUILDING'S ROOFING AND FLASHING (EXCLUDING ANY OF THE ROOF'S STRUCTURAL COMPONENTS), AND (II) THE ASPHALT PAVED PARKING AREAS AND DRIVEWAYS;
(c) Landscaping and grounds maintenance, including lawn mowing, tree pruning, annual flower planting, snow plowing and sweeping of the parking lot; and the maintenance and repair (but not replacement) of any existing irrigation system; and
(d) Maintenance of the insurance coverages described in Sections 5.1 and 9.7.
The manner in which Landlord provides the services described in Section 6.1,
including the manner in which the Common Areas are maintained and operated and
the expenditures therefor shall be at the sole commercially reasonable
discretion of Landlord and in accordance with the standards of comparable
office/industrial buildings in New Haven County - Shoreline Area (Branford,
Guilford, East Haven, New Haven, West Haven and Milford) (the "NEW HAVEN COUNTY
SHORELINE AREA"). Landlord shall have the right to approve the utility providers
at the Building, which approval shall not be unreasonably withheld, and Tenant
shall pay all actual costs associated with all utility services as provided in
Section 5.3 hereof. Landlord's failure to furnish any of such services when such
failure is caused by accidents, the making of repairs, alterations or
improvements, labor difficulties, difficulty in obtaining adequate service or
supplies from the sources from which they are usually obtained for the Building,
or governmental constraints or any other cause beyond Landlord's reasonable
control, shall not result in any liability to Landlord. Tenant shall not be
entitled to any abatement or reduction of rent by reason of such failure, and
Tenant shall not be relieved from the performance of any covenant or agreement
in this Lease.
6.2 Additional Services. LANDLORD SHALL IMPOSE REASONABLE CHARGES AND MAY ESTABLISH REASONABLE RULES AND REGULATIONS WITH RESPECT TO ANY ADDITIONAL SERVICES THAT ARE REQUESTED AND WHICH LANDLORD AGREES TO SUPPLY TO THE PREMISES.
6.3 Excessive Current. TENANT SHALL COMPLY WITH THE CONNECTED ELECTRICAL LOAD REASONABLY ESTABLISHED BY LANDLORD FOR THE BUILDING. TENANT AGREES THAT AT ALL TIMES ITS USE OF ELECTRIC CURRENT SHALL NEVER EXCEED THE CAPACITY OF THE FEEDERS TO THE PREMISES OR THE RISERS OR WIRING INSTALLED THEREON. TENANT SHALL NOT, CONNECT ANY EQUIPMENT, TO THE BUILDING'S ELECTRICAL SYSTEM THAT WOULD REQUIRE ELECTRICAL ENERGY IN THE PREMISES IN EXCESS OF THE CAPACITY OF THE EXISTING FEEDERS OR WIRING INSTALLATIONS THEN SERVING THE PREMISES. TENANT ALSO AGREES TO SUPPLY AND REPLACE ALL LAMPS, BULBS, BALLASTS AND STARTERS USED IN THE PREMISES. TENANT SHALL NOT, WITHOUT PRIOR CONSENT OF LANDLORD IN EACH INSTANCE, MAKE OR PERFORM, OR PERMIT THE MAKING OR PERFORMING OF, ANY ALTERATION TO WIRING INSTALLATIONS OR OTHER ELECTRICAL FACILITIES IN OR SERVING THE BUILDING OR ANY ADDITIONS TO THE ELECTRICAL FIXTURES, MACHINES, EQUIPMENT OR OTHER APPLIANCES AT THE BUILDING WHICH UTILIZE ELECTRICAL ENERGY.
6.4 Maintenance of Common Areas. EXCEPT AS OTHERWISE STATED HEREIN,
LANDLORD RESERVES THE RIGHT FROM TIME TO TIME TO (A) MAKE CHANGES IN THE SHAPE,
SIZE, LOCATION AND APPEARANCE OF THE LAND AND IMPROVEMENTS WHICH CONSTITUTE THE
COMMON AREAS, PROVIDED THAT LANDLORD SHALL NOT MATERIALLY IMPAIR THE TENANT'S
ABILITY TO OPERATE ITS BUSINESS, EXCEPT TEMPORARY IMPAIRMENTS REQUIRED BY SAID
CHANGES; (B) MAKE SUCH IMPROVEMENTS, ALTERATIONS AND REPAIRS TO THE COMMON AREAS
AS MAY BE REQUIRED BY GOVERNMENTAL AUTHORITIES OR BY UTILITY COMPANIES SERVICING
THE BUILDING; (C) CONSTRUCT, MAINTAIN AND OPERATE LIGHTING AND OTHER FACILITIES
ON ALL SAID AREAS AND IMPROVEMENTS; (D) GRANT EXCLUSIVE PARKING RIGHTS TO
PROPERTY TENANTS; AND (E) TO ADD OR REMOVE IMPROVEMENTS AND
FACILITIES TO OR FROM THE COMMON AREAS, PROVIDED THAT LANDLORD SHALL NOT (I) REDUCE THE AMOUNT OF TENANT'S PARKING SPACES NOR RELOCATE TENANT'S EXCLUSIVE SPACES OUTSIDE OF THE EXCLUSIVE PARKING AREA; NOT (II) UNREASONABLY INTERFERE WITH THE CONDUCT OF TENANT'S BUSINESS AT THE PREMISES INCLUDING ACCESS TO AND EGRESS FROM THE PREMISES, PARKING AREA AND THE PROPERTY. THE USE OF THE COMMON AREAS SHALL BE SUBJECT TO SUCH REASONABLE REGULATIONS AND CHANGES THEREIN AS LANDLORD SHALL MAKE FROM TIME TO TIME, INCLUDING (BUT NOT BY WAY OF LIMITATION) THE RIGHT TO CLOSE FROM TIME TO TIME, IF NECESSARY, ALL OR ANY PORTION OF THE COMMON AREAS TO SUCH EXTENT AS MAY BE LEGALLY SUFFICIENT, IN THE REASONABLE OPINION OF LANDLORD'S COUNSEL, TO PREVENT A DEDICATION THEREOF OR THE ACCRUAL OF RIGHTS OF ANY PERSON OR OF THE PUBLIC THEREIN; PROVIDED, HOWEVER, LANDLORD SHALL DO SO AT SUCH TIMES AND IN SUCH MANNER AS SHALL MINIMIZE ANY DISRUPTION TO TENANT TO THE EXTENT REASONABLY POSSIBLE, AND PROVIDED LANDLORD SHALL NOT (I) REDUCE THE AMOUNT OF TENANT'S PARKING SPACES NOR RELOCATE TENANT'S EXCLUSIVE SPACES OUTSIDE OF THE EXCLUSIVE PARKING AREA; NOR (II) UNREASONABLY INTERFERE WITH THE CONDUCT OF TENANT'S BUSINESS AT THE PREMISES INCLUDING ACCESS TO AND EGRESS FROM THE PREMISES, PARKING AREA AND THE PROPERTY.
6.5 Access to Premises.
6.5.1 RIGHT OF ENTRY. LANDLORD SHALL HAVE THE RIGHT TO ENTER THE PREMISES WITHOUT ABATEMENT OF RENT AT ALL REASONABLE TIMES UPON REASONABLE PRIOR NOTICE TO TENANT (EXCEPT IN EMERGENCIES WHEN NO ADVANCE NOTICE SHALL BE REQUIRED), (A) TO SUPPLY ANY SERVICE TO BE PROVIDED BY LANDLORD TO TENANT HEREUNDER, (B) TO SHOW THE PREMISES TO LANDLORD'S MORTGAGEE AND TO PROSPECTIVE PURCHASERS, MORTGAGEES AND TO TENANTS IN LAST TWELVE (12) MONTHS OF TERM, (C) TO INSPECT, ALTER, IMPROVE OR REPAIR THE PREMISES AND ANY PORTION OF THE BUILDING, AND (D) TO INTRODUCE CONDUITS, RISERS, PIPES AND DUCTS TO AND THROUGH THE PREMISES, PROVIDED THAT IN EXERCISING ANY SUCH RIGHT, LANDLORD WILL CAUSE ALL SUCH CONDUITS, RISERS, PIPES AND DUCTS TO BE PLACED ABOVE DROPPED CEILINGS, WITHIN WALLS, OR BELOW FLOORS OR IN CLOSETS, TO THE EXTENT REASONABLY PRACTICABLE. IN CONDUCTING ANY SUCH ACTIVITIES, LANDLORD SHALL USE REASONABLE EFFORTS NOT TO DISRUPT THE CONDUCT OF TENANT'S BUSINESS OPERATIONS.
6.5.2 KEYS. FOR EACH OF THE PURPOSES STATED ABOVE IN THIS SECTION 6.5, LANDLORD SHALL AT ALL TIMES HAVE AND RETAIN A KEY (OR AN ELECTRONIC ACCESS CARD FOR TENANT'S SECURITY SYSTEM) WITH WHICH TO UNLOCK ALL OF THE DOORS IN, UPON AND ABOUT THE PREMISES, EXCLUDING TENANT'S VAULTS AND SAFES, OR SPECIAL SECURITY AREAS. LANDLORD SHALL HAVE THE RIGHT TO USE ANY AND ALL MEANS THAT LANDLORD MAY DEEM NECESSARY OR PROPER TO OPEN SAID DOORS IN AN EMERGENCY, IN ORDER TO OBTAIN ENTRY TO ANY PORTION OF THE PREMISES. LANDLORD AND ITS AGENTS AND REPRESENTATIVES SHALL HAVE THE RIGHT TO ENTER UPON THE PREMISES FOR ANY AND ALL OF THE PURPOSES SET FORTH IN THIS ARTICLE.
ARTICLE 7 CONDUCT OF BUSINESS BY TENANT
7.1 Tenant's Business Operations.
7.1.1 PERMITTED USES. THE PREMISES SHALL BE USED AND OCCUPIED FOR GENERAL OFFICE, WAREHOUSE AND "LIGHT" MANUFACTURING AND ASSEMBLY PURPOSES ONLY. TENANT SHALL NOT USE OR OCCUPY, OR PERMIT THE USE OR OCCUPANCY OF, THE PREMISES OR ANY PART THEREOF FOR ANY USE OTHER THAN THE SOLE USE SPECIFICALLY SET FORTH ABOVE OR IN ANY ILLEGAL MANNER, OR IN ANY MANNER THAT, IN LANDLORD'S REASONABLE JUDGMENT, WOULD ADVERSELY AFFECT OR INTERFERE WITH ANY SERVICES REQUIRED TO BE FURNISHED BY LANDLORD TO TENANT OR TO ANY OTHER TENANT OR OCCUPANT OF THE BUILDING, OR WITH THE USE AND ENJOYMENT OF ANY PART OF THE BUILDING BY ANY OTHER TENANT OR OCCUPANT. TENANT AGREES THAT IT WILL NOT EXCEED THE MAXIMUM FLOOR-BEARING CAPACITY FOR THE PREMISES.
7.1.2 Prohibited Actions; Disclosures. Tenant shall not commit or suffer to be committed, any waste upon the Premises or the Property, or any public or private nuisance or other act or thing which may disturb the quiet enjoyment of any other tenant at the Property. Tenant agrees at all times to cause the Premises to be operated in compliance with all "Applicable Laws" (defined below in Section 7.3), including but not limited to those relating to zoning, environmental protection, health, and safety. Tenant further agrees to promptly cure any such violation at its own expense, and shall furthermore defend and indemnify Landlord, and its mortgagees, and officers, agents, and employees thereof respectively, for any and all liability, loss, costs (including reasonable attorneys' fees and reasonable expenses), damages, responsibilities or obligations incurred as a result of any violation of any of the foregoing, except to the extent caused by Landlord, its agents', employees' or contractors' breach of this Lease, gross negligence or willful misconduct. At the request of the Landlord, Tenant shall submit to the Landlord, or shall make available for inspection and copying upon reasonable notice and at reasonable times, any or all of the documents and materials prepared by or for Tenant pursuant to any environmental law or regulation or submitted to any governmental regulatory agency in conjunction therewith.
7.2 Tenant's Personal Property. TENANT SHALL BE RESPONSIBLE FOR ANY AD
VALOREM TAXES ON ITS PERSONAL PROPERTY (WHETHER OWNED OR LEASED) AND ON THE
VALUE OF ITS LEASEHOLD IMPROVEMENTS IN THE PREMISES (WHICH ARE IN EXCESS OF
BUILDING STANDARD IMPROVEMENTS), AND IF THE TAXING AUTHORITIES DO NOT SEPARATELY
ASSESS TENANT'S LEASEHOLD IMPROVEMENTS, LANDLORD MAY MAKE A REASONABLE
ALLOCATION OF THE IMPOSITIONS TO SUCH IMPROVEMENTS AND CHARGE TENANT FOR THE
SAME AS ADDITIONAL RENT.
7.3 Compliance with Laws. TENANT, AT TENANT'S EXPENSE, SHALL COMPLY
PROMPTLY WITH THE LAWS, ORDINANCES, RULES, REGULATIONS AND ORDERS OF ALL
GOVERNMENTAL AUTHORITIES IN EFFECT FROM TIME TO TIME DURING THE TERM INCLUDING,
WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES ACT ("ADA"), AND ALL
APPLICABLE FEDERAL, STATE AND MUNICIPAL BUILDING, ZONING, FIRE, HEALTH, SAFETY
AND ENVIRONMENTAL LAWS (COLLECTIVELY THE "Applicable Laws") THAT SHALL IMPOSE
ANY DUTY ON TENANT WITH RESPECT TO THE PREMISES, BUILDING AND COMMON AREAS OR
THE USE, OCCUPANCY OR OPERATION THEREOF. TENANT SHALL BE RESPONSIBLE FOR LEGAL
COMPLIANCE, INCLUDING THE REQUIREMENTS OF THE ADA, WITH RESPECT TO (A) ANY AND
ALL REQUIREMENTS ON ACCOUNT OF TENANT'S USE OF, OR OPERATIONS IN, THE PREMISES,
AND (B) ALL ALTERATIONS DESIGNED OR CONSTRUCTED BY TENANT OR ITS CONTRACTORS OR
AGENTS THAT AFFECT THE PREMISES OR THE EXISTING BUILDING. TENANT WILL OBTAIN AND
MAINTAIN IN FULL FORCE AND EFFECT ANY AND ALL LICENSES AND PERMITS NECESSARY FOR
ITS USE. TENANT SHALL MAKE ANY ALTERATIONS IN OR TO THE PREMISES, BUILDING AND
COMMON AREAS IN ORDER TO COMPLY WITH THE FOREGOING, WHICH ARE NECESSITATED OR
OCCASIONED, IN WHOLE OR IN PART BY THE USE OR OCCUPANCY OR MANNER OF USE,
OCCUPANCY OR OPERATION OF THE PREMISES BY TENANT OR ANY OF ITS OFFICERS,
EMPLOYEES, AGENTS, CONTRACTORS, INVITEES, LICENSEES OR SUBTENANTS (THE "Tenant
Parties").
7.4 Landlord's Rules and Regulations. TENANT SHALL FAITHFULLY OBSERVE AND
COMPLY WITH THE RULES AND REGULATIONS ATTACHED TO THIS LEASE AS EXHIBITS C-1 AND
C-2, AND ALL REASONABLE MODIFICATIONS THEREOF AND ADDITIONS THERETO FROM TIME TO
TIME PUT INTO EFFECT BY LANDLORD (THE "Rules and Regulations"). TENANT SHALL NOT
USE OR PERMIT THE USE OF THE PREMISES IN ANY MANNER THAT WILL TEND TO CREATE
WASTE OR A NUISANCE, OR WHICH SHALL TEND TO UNREASONABLY DISTURB OTHER TENANTS
OF THE BUILDING. LANDLORD SHALL NOT BE RESPONSIBLE TO TENANT FOR THE
NONPERFORMANCE OF ANY OF THE RULES AND REGULATIONS BY ANY OTHER TENANTS OR
OCCUPANTS OF THE PROPERTY. LANDLORD SHALL USE REASONABLE EFFORTS TO ENFORCE THE
RULES AND REGULATIONS IN A FAIR AND NON-DISCRIMINATORY MANNER. IN THE EVENT OF
AN EXPRESS AND DIRECT CONFLICT BETWEEN THE TERMS, COVENANTS, AGREEMENTS AND
CONDITIONS OF THIS LEASE AND THE TERMS, COVENANTS, AGREEMENTS AND CONDITIONS OF
SUCH RULES AND REGULATIONS, AS MODIFIED AND AMENDED FROM TIME TO TIME BY
LANDLORD, THIS LEASE SHALL CONTROL.
7.5 No Liens. TENANT SHALL KEEP THE PREMISES AND PROPERTY FREE FROM ANY LIENS OR ENCUMBRANCES ARISING OUT OF ANY WORK PERFORMED, MATERIAL FURNISHED OR OBLIGATIONS INCURRED BY OR FOR TENANT OR ANY PERSON OR ENTITY CLAIMING THROUGH OR UNDER TENANT. ANY CLAIM TO, OR LIEN UPON, THE PREMISES OR THE BUILDING ARISING FROM ANY ACT OR OMISSION OF TENANT SHALL ACCRUE ONLY AGAINST THE LEASEHOLD ESTATE OF TENANT AND SHALL BE SUBJECT AND SUBORDINATE TO THE PARAMOUNT TITLE AND RIGHTS OF LANDLORD IN AND TO THE PREMISES AND THE PROPERTY. IF ANY MECHANICS' OR OTHER LIEN SHALL BE FILED AGAINST THE PREMISES OR THE PROPERTY PURPORTING TO BE FOR LABOR OR MATERIAL FURNISHED OR TO BE FURNISHED AT THE REQUEST OF THE TENANT, THEN TENANT SHALL AT ITS EXPENSE CAUSE SUCH LIEN TO BE DISCHARGED OF RECORD BY PAYMENT, BOND OR OTHERWISE, WITHIN THIRTY (30) DAYS AFTER THE FILING THEREOF.
7.6 Environmental Compliance.
7.6.1 DEFINED TERMS. AS USED IN THIS LEASE, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
(a) "HAZARDOUS SUBSTANCES" shall mean (i) any substance that is defined, listed or otherwise classified as a pollutant, toxic substance, hazardous substance, hazardous waste, hazardous material extremely hazardous waste, or words of similar meaning or regulatory effect under any Environmental Laws, including without limitation, "Hazardous Waste" as defined by the federal Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss.6901 et seq. and regulations promulgated thereunder; and "Hazardous Substance" as defined by the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") 42 U.S.C. ss.9601 et seq. and regulations promulgated thereunder; and (ii) any substance that may, if not properly used, handled, managed, stored, or disposed of, pollute, contaminate, harm or have any detrimental effect on human health or the environment; including, but not limited to, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives and toxic mold.
(b) "ENVIRONMENTAL LAW(S)" shall mean (i) any one or more (as the context may require) federal, state or local law or regulation, effective during the Term and during any period following the Term during which any Tenant indemnity or other obligation survives as provided in this Lease, relating to the handling, use, control, management, treatment, storage, disposal, release or threat of release of any Hazardous Substance, including without limitation, CERCLA, RCRA, the federal Water Pollution Control Act ("CWA"), 33 U.S.C. ss.1251 et seq., the federal Clean Air Act ("CAA"), 42 U.S.C. ss.ss. 7401 et seq., the Toxic Substances Control Act ("TSCA"), 7 U.S.C. ss. 136 et seq., the Safe Drinking Water Act ("SDWA"), 42 U.S.C. ss. 300f et seq., the Occupation Safety and Health Act of 1970 (the "OSH ACT"), 29 U.S.C. ss. 651 et seq., the Rivers and Harbors Act of 1970, as amended, 33 U.S.C. 401 ss. et seq., and any similar state or local laws, rules or regulations; and/or (ii) any and all requirements arising under applicable federal, state or local laws, statutes, rules, ordinances, codes, common law, licenses, permits, approvals, plans, authorizations, and all applicable judicial, administrative, and regulatory decrees, judgments, and orders, effective during the Term and during any period following the Term during which any Tenant indemnity or other obligation survives as provided in this Lease, relating to the protection of human health or the environment, including without limitation any and all requirements pertaining to reporting, licensing, authorizing, approving, permitting, investigating, and remediating emissions, discharges, releases, or threat of releases of any Hazardous Substances into the indoor or outdoor air, surface water, groundwater, or land, or otherwise into the environment, or relating to the manufacture, operation, processing, distribution,
use, treatment, storage, disposal, transport, handling or management of any Hazardous Substance and any and all requirements pertaining to the protection of the health and safety of employees or the public and/or the environment.
(c) "RELEASE" shall mean any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, dumping, disposing, generating, storing (including storing in above ground or underground storage tanks) or other movement of Hazardous Substances into the environment on, from, under, or within the Premises or Property, or transportation of Hazardous Substances to or from the Premises or Property, including continuing migration of Hazardous Substances into or through soil, surface water or groundwater. "THREATENED RELEASE" shall mean a condition which, if not altered or mitigated, would be likely to result in a Release.
(d) "GOVERNMENTAL AUTHORITY" shall mean the Federal government, or any state or other political subdivision thereof, or any agency, court or body of the Federal government, any state or other political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions over the Premises or Property.
7.6.2 HAZARDOUS SUBSTANCES. TENANT SHALL NOT GENERATE, STORE, DISPOSE OF OR RELEASE, OR PERMIT THE STORAGE, USE, DISPOSAL OR RELEASE OF, ANY HAZARDOUS SUBSTANCES, IN, ABOVE, ON OR UNDER THE PREMISES OR THE PROPERTY (EXCEPT AS EXPRESSLY AUTHORIZED BELOW AND FURTHER EXCEPT FOR CUSTOMARY SUPPLIES MAINTAINED IN AMOUNTS AND IN A MANNER CONSISTENT WITH REASONABLE COMMERCIAL OFFICE PRACTICES IF STORED, USED AND DISPOSED OF, IN ACCORDANCE WITH ALL APPLICABLE LAWS AND FIRE PROTECTION REQUIREMENTS OF ANY BUILDING INSURERS RELATING THERETO). TENANT SHALL REMOVE, CLEAN-UP AND REMEDIATE ANY HAZARDOUS SUBSTANCE ON THE PREMISES IN ACCORDANCE WITH APPLICABLE LAWS, PROVIDED THAT THE PRESENCE OF SUCH HAZARDOUS SUBSTANCE RESULTED FROM THE ACTION OR INACTION OF TENANT OR ANY TENANT PARTIES. TENANT IS AUTHORIZED TO STORE, USE AND DISPOSE OF HAZARDOUS SUBSTANCES ONLY AS REQUIRED FOR THE MANUFACTURING, SERVICING AND REPAIR OF MEDICAL PRODUCTS MANUFACTURED BY TENANT CONSISTENT WITH THE USES EXPRESSLY PERMITTED UNDER SECTION 7.1 HEREOF, SUBJECT TO TENANT'S OBLIGATION (A) TO STORE, USE AND DISPOSE OF ANY SUCH HAZARDOUS SUBSTANCES IN ACCORDANCE WITH THE ENVIRONMENTAL LAWS AND THE OTHER TERMS, CONDITIONS AND COVENANTS OF THIS LEASE AND (B) NOT TO GENERATE MONTHLY QUANTITIES OF HAZARDOUS WASTE (AS THAT TERM IS DEFINED IN RCRA AND THE CONNECTICUT STATUTE) WHICH WOULD CAUSE THE PROPERTY (OR ANY PART THEREOF) TO CONSTITUTE AN "ESTABLISHMENT" (AS DEFINED IN THE CONNECTICUT TRANSFER ACT, C.G.S. SS. 22A-134).
7.6.3 CONNECTICUT TRANSFER ACT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 7.6, TENANT SHALL NOT TAKE OR PERMIT ANY ACTION THAT WOULD CAUSE THE PREMISES OR PROPERTY TO BECOME AN "ESTABLISHMENT". TENANT SHALL COOPERATE WITH LANDLORD IN SATISFYING ANY LEGAL REQUIREMENTS IMPOSED UPON LANDLORD RELATING TO TENANT'S OPERATIONS, AND, UPON LANDLORD'S WRITTEN REQUEST, SHALL FURNISH COMPLETE INFORMATION TO LANDLORD WITH REGARD TO ITS OPERATIONS. IN CONNECTION WITH ANY "TRANSFER" (AS DEFINED IN THE CONNECTICUT TRANSFER ACT) SUBSEQUENT TO THE COMMENCEMENT DATE, THAT REQUIRES COMPLIANCE WITH THE CONNECTICUT TRANSFER ACT, INCLUDING ANY TRANSFER OF TENANT'S INTEREST IN THE LEASE OR TENANT'S BUSINESS OPERATIONS, OR ANY TRANSFER BY LANDLORD OF THE PREMISES OR THE PROPERTY (OR ANY PORTION THEREOF), TENANT SHALL COMPLY WITH THE CONNECTICUT TRANSFER ACT RELATIVE TO ITS OPERATIONS AT THE PREMISES, AND TENANT SHALL EXECUTE SUCH TRANSFER DOCUMENTS AND CERTIFICATES AS REASONABLY DETERMINED BY LANDLORD TO BE NECESSARY AS A RESULT OF TENANT'S BUSINESS OPERATIONS AND USE OF THE PREMISES IN THE EVENT OF ANY SUCH TRANSFER. IN THE EVENT THAT THE TENANT HAS CAUSED THE PREMISES OR PROPERTY, IN
WHOLE OR IN PART, TO MEET THE DEFINITION OF AN ESTABLISHMENT PURSUANT TO THE CONNECTICUT TRANSFER ACT, THEN THE TENANT SHALL (I) ACT AS THE CERTIFYING PARTY IN ANY REQUIRED STATEMENT OR FILING UNLESS THE CONNECTICUT TRANSFER ACT REQUIRES ANOTHER PARTY TO DO SO; AND (II) IN ADDITION TO THE ENVIRONMENTAL INDEMNITY BY TENANT PROVIDED BELOW IN SECTION 7.6.9 HEREOF, TENANT SHALL INDEMNIFY, DEFEND AND HOLD FULLY HARMLESS LANDLORD AND ITS GRANTEES AND SUCCESSORS IN INTEREST TO OWNERSHIP OF THE PREMISES FROM AND AGAINST ANY AND ALL LIABILITY, LOSS, SUITS, CLAIMS, ACTIONS, CAUSES OF ACTION, REMEDIATION ORDERS, PROCEEDINGS, DEMANDS, COSTS, PENALTIES, DAMAGES, FINES AND EXPENSES, INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES, CONSULTANTS' FEES, LABORATORY FEES, REMEDIATION COSTS, AND OTHER COSTS WHICH MAY BE IMPOSED UPON, INCURRED BY OR ASSERTED OR AWARDED AGAINST LANDLORD AND ITS GRANTEES AND SUCCESSORS IN INTEREST TO OWNERSHIP OF THE PREMISES ARISING OUT OF OR ON ACCOUNT OF TENANT'S FAILURE TO EXECUTE AND DELIVER ANY SUCH TRANSFER DOCUMENTS AND CERTIFICATES AND ANY INVESTIGATION, REMEDIATION OR MONITORING NECESSARY TO COMPLY WITH THE CONNECTICUT TRANSFER ACT, BUT ONLY TO THE EXTENT THAT SUCH COMPLIANCE WAS REQUIRED AS A RESULT OF AN ACTION TAKEN OR PERMITTED BY TENANT OR ANY TENANT PARTIES THAT CAUSED THE PREMISES TO BECOME AN "ESTABLISHMENT" AS DEFINED IN THE CONNECTICUT TRANSFER ACT.
7.6.4 NOTICE TO LANDLORD OF RELEASES AND OTHER CONDITIONS. TENANT SHALL IMMEDIATELY NOTIFY LANDLORD IF TENANT BECOMES AWARE OF (A) A RELEASE ON, AT, OR IN THE PREMISES OR PROPERTY; (B) ANY LIEN, NOTICE OR ORDER FROM A GOVERNMENTAL AUTHORITY OR OTHER PERSON ISSUED UNDER ANY ENVIRONMENTAL LAWS AS A RESULT OF THE VIOLATION OR ALLEGED VIOLATION OF ANY ENVIRONMENTAL LAWS BY TENANT OR ANY TENANT PARTIES; AND (C) ANY OCCURRENCE OR CONDITION ON ANY REAL PROPERTY ADJOINING THE PROPERTY THAT COULD CAUSE THE PROPERTY OR ANY PART THEREOF TO BE SUBJECT TO ANY DISCLOSURE REQUIREMENTS UNDER ANY ENVIRONMENTAL LAWS, (D) THE IMPOSITION OF ANY RESTRICTIONS ON THE OWNERSHIP, OCCUPANCY, TRANSFERABILITY OR USE OF THE PROPERTY UNDER ANY ENVIRONMENTAL LAWS, SUCH AS LIENS, INSTITUTIONAL CONTROLS OR DEED RESTRICTIONS. TENANT WILL PROMPTLY FORWARD TO LANDLORD COPIES OF ANY WRITTEN NOTICES FROM ANY SUCH GOVERNMENTAL AUTHORITY OR OTHER PERSONS RECEIVED BY TENANT RELATING TO ALLEGED VIOLATIONS OF ANY ENVIRONMENTAL LAW. TENANT WILL PROMPTLY PAY WHEN DUE ANY FINE OR ASSESSMENT PURSUANT TO THE ENVIRONMENTAL LAWS WHICH ARISES FROM THE ACTS OR OMISSIONS OF TENANT OR ANY TENANT PARTIES ON, AT, OR IN THE PREMISES OR PROPERTY WHICH ARE IN VIOLATION OF ANY ENVIRONMENTAL LAWS AND ANY FINE OR ASSESSMENT PURSUANT TO THE ENVIRONMENTAL LAWS WHICH ARISES FROM A CONDITION AT THE PREMISES OR PROPERTY THAT EXISTED PRIOR TO THE COMMENCEMENT DATE.
7.6.5 Notice of Claims by Tenant. Tenant shall give written notice to Landlord of any claim, litigation, investigation, administrative enforcement action or proceeding made or threatened and alleging a Release or Threatened Release of Hazardous Substances at the Premises or Property (the "PENDING CLAIM"), or of any investigations or proceedings or inquiries regarding conditions at the Premises or Property before or by any Governmental Authority (including, without limitation, the Connecticut Department of Environmental Protection) with respect to the presence of any Hazardous Substances on the Premises or Property or the migration thereof from or to other property (the "PROCEEDINGS"), promptly after Tenant receives actual knowledge of same, and shall promptly deliver to Landlord any notice of any violation of Environmental Laws by Tenant received by Tenant.
7.6.6 Prohibited Activities; Remediation. If at any time (a) the operation or use of the Premises by Tenant violates any applicable Environmental Law, (b) Hazardous Substances are Released at, in, on, under or about the Property in violation of any applicable Environmental Law, (c) if Tenant's actions or omissions result in the requirement of any form of cleanup or corrective action of Hazardous Substances on the
Premises or Property (or any other real property adjacent or adjoining the Property), then, Tenant shall take, at Tenant's sole cost and expense, such remedial actions as may be necessary to fully comply with all applicable Environmental Laws. Any such remedial action taken by Tenant ("REMEDIAL WORK"), shall be performed in a manner approved by Landlord by one or more contractors, approved in advance in writing by Landlord, and under the supervision of a consulting engineer approved in advance in writing by Landlord (such approvals not to be unreasonably withheld), and shall be carried out at Tenant's sole cost and expense in full compliance with all Environmental Laws and all requirements of any Governmental Authorities having jurisdiction over such Remedial Work. Such work shall be performed in such manner that it does not result in the imposition upon the Premises or Property of any more stringent or limited restrictions on the ownership, occupancy, transferability or use of the Premises or Property under any Environmental Laws, such as liens, institutional controls or deed restrictions, than existed with regard to the Premises or Property before undertaking the Remedial Work. Any proposed Remedial Work shall be performed pursuant to a remediation plan consistent with the requirements of applicable Environmental Laws and shall be subject to Landlord's prior review and approval which shall not be unreasonably withheld. Tenant shall give Landlord written notice of any Remedial Work to be undertaken by Tenant on or affecting the Premises or Property not less than thirty (30) days prior to commencing such work (unless notice is not practical because of the need for immediate response, in which case Tenant shall notify Landlord in writing immediately upon obtaining actual knowledge of the need for such Remedial Work). All costs and expenses of Remedial Work which is the obligation of Tenant shall be paid by Tenant, including, without limitation, the charges of all contractor(s) and any consulting engineer(s) and the expense of the review by, and supervision of, Landlord's environmental consultant. No consent or approval by Landlord given or withheld in connection with any such Remedial Work, nor any inspection or monitoring by Landlord, shall be deemed to impose any liability on Landlord with respect to such Remedial Work or the manner, quality or sufficiency thereof.
7.6.7 Access: Inspection. Tenant hereby grants Landlord the right to
access to the Premises to inspect the Premises on not less than twenty-four
(24) hours notice to Tenant (except in the event of an emergency in which
case Landlord will use reasonable efforts commensurate with the nature of
the emergency condition to give Tenant prior notice) throughout the Term,
provided that such notice includes a reasonable basis for such inspection
to determine that Tenant is in compliance with Environmental Laws and the
provisions of this Article 7 of this Lease. Landlord shall conduct any such
inspection in a manner reasonably calculated to cause the least amount of
disruption consistent with the nature of the investigation to Tenant's
business and other legitimate purposes of occupation.
7.6.8 Environmental Liens. If a lien is filed against the Property by any Governmental Authority resulting from the need to expend or the actual expending of monies arising from an action or omission, whether intentional or unintentional, of Tenant or for which Tenant is responsible, resulting in the Release or Threatened Release of any Hazardous Substance into the air, waters or onto land located within or without the state where the Property is located, then Tenant shall within thirty (30) days from the date that Tenant receives notice that such lien has been placed against the Property, pay (or otherwise satisfy) the claim and remove the lien. If a lien is filed against the Property by any Governmental Authority resulting from the need to expend or the actual expending of monies arising from an action or omission, whether intentional or unintentional, of the Landlord or arising by virtue of a condition existing prior to the Tenant taking occupancy or for which the Landlord is responsible, resulting in the Release or Threatened Release of any Hazardous Substance into the air, waters or onto land located within or without the state where the Property is located, then Landlord shall within thirty (30) days from the
date that Landlord receives notice that such lien has been placed against the Property, pay (or otherwise satisfy) the claim and remove the lien.
7.6.9 Environmental Indemnity by Tenant. In addition to the indemnity arising under Section 7.6.3 in connection with the Connecticut Transfer Act, Tenant shall indemnify, defend, and hold Landlord and any mortgagee of the Property fully harmless, from and against any and all liability, loss, suits, claims, actions, causes of action, remediation orders, proceedings, demands, costs, penalties, damages, fines and expenses, including, without limitation, attorneys' fees, consultants' fees, laboratory fees, remediation costs, and other costs of Remedial Work, and the costs and expenses of investigating and defending any claims or proceedings, resulting from, or attributable to:
(a) Except to the extent caused by or arising out of the act or omission of the Landlord or a Landlord party, the Release or Threatened Release of any Hazardous Substance at, in, on, under, above, from or affecting the Premises or the Property arising from the action, inaction or negligence of Tenant, its officers, employees, contractors, agents, subtenants or invitees, or arising out the generation, storage, treatment, handling, transportation, disposal or release by Tenant of any Hazardous Substance at or near the Premises or the Property, during any period of ownership of the Property by Tenant preceding the Commencement Date and during the Term,
(b) any violation(s) by Tenant of any Environmental Law regarding Hazardous Substances, during any period of ownership of the Property by Tenant preceding the Commencement Date and during the term,
(c) default of any of its agreements under this Section 7.6 of this Lease;
(d) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to subsections
(a), (b) or (c) above; or
(e) any lawsuit brought or threatened against, settlement reached by, or order or directive of or by any Governmental Authority relating to such Hazardous Substances under subsections (a), (b) or (c) above issued against the Landlord. In any action, suit or proceeding brought against Landlord by reason of any matters included with this indemnity, Tenant will, at Tenant's expense, resist and defend such action, suit or proceeding with counsel reasonably acceptable to Landlord. The parties agree that such indemnification by Tenant shall survive the expiration or sooner termination of this Lease.
7.6.10 Environmental Indemnity by Landlord. Landlord shall indemnify, defend, and hold Tenant fully harmless from and against any and all liability, loss, suits, claims, actions, causes of action, remediation orders, proceedings, demands, costs, penalties, damages, fines and expenses, including, without limitation, attorneys' fees, consultants' fees, laboratory fees, and the costs and expenses of investigating and defending any claims or proceedings, resulting from, or attributable to:
(a) Except to the extent caused by or arising out of the act or omission of the Tenant or a Tenant Party, the Release of any Hazardous Substances at, in, on, under, above, or from the Premises or the Property caused by the action, inaction or negligence of Landlord, its officers, employees, contractors and agents, during any period of ownership of the Property by Landlord during the Term,
(b) any other violation(s) by Landlord of any Environmental Law regarding Hazardous Substances on or in the Premises or Property, during any period of ownership of the Property by Landlord during the Term,
(c) default of any of Landlord's agreements under this Section 7.6 of this Lease;
(d) any personal injury (including wrongful death) or property damage (real or personal) resulting from subsections (a) or (b) above; or
(e) any lawsuit brought or threatened, settlement reached, or order or directive of or by any Governmental Authority resulting from subsections (a) or (b) above. In any action, suit or proceeding brought against Tenant by reason of any matters included with this indemnity, Landlord will, at Landlord's expense, resist and defend such action, suit or proceeding with counsel reasonably acceptable to Tenant. The parties agree that such indemnification by Landlord shall survive the expiration or sooner termination of this Lease.
7.6.11 Environmental Reports. Tenant shall provide Landlord with all environmental reports, whether or not in draft form and subject to confidentiality requirements, in its possession or commissioned by Tenant prior to and subsequent to the Commencement Date until termination of this Lease. In addition, Tenant agrees to provide Landlord with information reasonably required by Landlord to ascertain that Tenant is in compliance with the Environmental Laws and provisions of Article 7 of this Lease, including but not limited to hazardous waste manifests and reports to state and federal environmental agencies. Upon Landlord's request in writing, Tenant promptly shall furnish additional information to Landlord with regard to any generation, storage, use, or disposal of Hazardous Substances as part of Tenant's operations.
7.7 Signage. EXCEPT FOR THE EXISTING SIGNAGE AT THE BUILDING, TENANT SHALL NOT HAVE ANY RIGHT TO PLACE ANY SIGN, MONUMENT, ADVERTISING, ANTENNA OR OTHER SIGNAGE OR STRUCTURE AT ANY LOCATION OUTSIDE THE PREMISES AT THE BUILDING OR THE PROPERTY. LANDLORD SHALL HAVE THE RIGHT TO APPROVE OR DISAPPROVE THE CONTENT, DESIGN, SIZE AND LOCATION OF ANY AND ALL SIGNAGE PROPOSED TO BE ERECTED OR MAINTAINED AT THE PREMISES, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD. TENANT SHALL PAY FOR ALL COSTS TO CHANGE SIGNAGE AS A RESULT OF A CHANGE IN THE NAME OF THE BUSINESS OCCUPYING THE PREMISES. IF LANDLORD APPROVES ANY ADDITIONAL SIGNAGE, TENANT SHALL BE REQUIRED TO OBTAIN ANY REQUIRED ZONING AND RELATED APPROVALS FROM APPLICABLE GOVERNMENTAL AUTHORITIES. THE INSTALLATION OF ANY APPROVED SIGNAGE SHALL BE PERFORMED IN A GOOD AND WORKMANLIKE MANNER IN ACCORDANCE WITH ALL APPLICABLE LAWS AND THE TERMS OF THIS LEASE. ANY PERMITTED SINGS INSTALLED ON OR ABOUT THE PREMISES SHALL BE REMOVED AT THE EXPIRATION OR SOONER TERMINATION OF THE TERM OF THIS LEASE AND THE PREMISES PROMPTLY REPAIRED OR RESTORED TO ITS ORIGINAL CONDITIONS WHERE SUCH SIGN HAS BEEN REMOVED. TENANT SHALL PAY ALL EXPENSES, AND ALL LICENSE AND PERMIT FEES RELATING TO THE INSTALLATION AND MAINTENANCE OF AUTHORIZED SIGNS, AND SHALL PAY ALL EXPENSES OF REMOVAL AND COSTS OF REPAIRS RESULTING THEREFROM.
ARTICLE 8 REPAIR AND MAINTENANCE; ALTERATIONS AND IMPROVEMENTS
8.1 Landlord's Obligations. SUBJECT TO SECTION 5.6 HEREOF, LANDLORD, AT ITS
EXPENSE, SHALL BE RESPONSIBLE TO REPLACE THE FOLLOWING PORTIONS OF THE PROPERTY
(THE "Landlord's Replacement Obligations"): (A) BUILDING'S ROOFING AND FLASHING
(EXCLUDING ANY OF THE ROOF'S STRUCTURAL COMPONENTS), SUBJECT TO TENANT'S
OBLIGATION TO COMPLETE THE "TENANT ROOF REPAIRS" (AS DEFINED BELOW IN SECTION
8.2.5), AT TENANT'S SOLE EXPENSE; (B) EXISTING BASE BUILDING ROOF TOP HVAC UNIT
(AND RELATED MAJOR COMPONENT EQUIPMENT) WHICH ARE IDENTIFIED IN EXHIBIT H
ATTACHED HERETO AS THE "BASE BUILDING HVAC UNITS", BUT EXCLUDING ANY SPECIALTY
UNITS THAT ARE USED IN TENANT'S ASSEMBLY OR MANUFACTURING PROCESSES; AND (C) THE
ASPHALT PAVED PARKING AREAS AND DRIVEWAYS, SUBJECT TO TENANT'S OBLIGATION TO
COMPLETE THE "TENANT PAVING REPAIRS" (AS DEFINED IN SECTION 8.2.6), AT TENANT'S
SOLE EXPENSE. LANDLORD, IN ITS SOLE DISCRETION, SHALL DETERMINE WHETHER THE
CONDITION OF ANY OF THE FOREGOING ITEMS WILL BE ADDRESSED BY REPAIR OR
REPLACEMENT. THE DECISION, MANNER AND SCHEDULING OF ANY REPAIR OR REPLACEMENT
INVOLVED IN LANDLORD'S REPLACEMENT OBLIGATIONS SHALL BE IN LANDLORD'S SOLE
DISCRETION. LANDLORD AGREES THAT IT SHALL UNDERTAKE LANDLORD'S REPLACEMENT
OBLIGATIONS IN A MANNER REASONABLY CALCULATED TO CAUSE THE LEAST AMOUNT OF
DISRUPTION OF TENANT'S BUSINESS OPERATION CONSISTENT WITH THE NATURE OF THE
CONSTRUCTION ACTIVITY AND NORMAL CONSTRUCTION PRACTICE. EXCEPT FOR LANDLORD'S
REPLACEMENT OBLIGATIONS AND THE SERVICES TO BE PROVIDED BY LANDLORD AS DESCRIBED
IN SECTION 6.1 HEREOF, AND AS OTHERWISE SET FORTH IN THIS LEASE, WHICH SHALL BE
AT TENANT'S COST AND EXPENSE, LANDLORD SHALL NOT HAVE ANY OBLIGATIONS TO
MAINTAIN OR REPAIR (INCLUSIVE OF ANY REPLACEMENTS) THE PREMISES, BUILDING OR
PROPERTY. THE COST OF THE MAINTENANCE AND REPAIR PERFORMED BY LANDLORD UNDER
SECTION 6.1 HEREOF SHALL BE INCLUDED IN OPERATING EXPENSES AND SHALL BE SUBJECT
TO REIMBURSEMENT UNDER ARTICLE 5 HEREOF. MAINTENANCE AND REPAIR EXPENSES PAID OR
INCURRED BY LANDLORD CAUSED BY TENANT'S WILLFUL MISCONDUCT OR NEGLIGENT ACTS OR
OMISSIONS SHALL BE PAID DIRECTLY TO LANDLORD BY TENANT IN ACCORDANCE WITH
SECTION 4.4.
8.2 Tenant's Obligations.
8.2.1 MAINTENANCE AND REPAIR. EXCEPT FOR THOSE REPLACEMENTS THAT
COMPRISE LANDLORD'S REPLACEMENT OBLIGATIONS UNDER SECTION 8.1 ABOVE, AND
THE SERVICES PROVIDED BY LANDLORD AS DESCRIBED IN SECTIONS 5.6 AND SECTION
6.1 HEREOF (WHICH SHALL BE SUBJECT TO REIMBURSEMENT BY TENANT AS OPERATING
EXPENSES AS PROVIDED BY SECTION 5.1 HEREOF), TENANT, AT TENANT'S COST AND
EXPENSE, SHALL KEEP THE PREMISES, BUILDING AND COMMON AREAS IN GOOD REPAIR
AND MAINTENANCE AT ALL TIMES, AND TENANT SHALL ALSO BE RESPONSIBLE, AT ITS
COST AND EXPENSE, TO MAKE ALL REPAIRS, REPLACEMENTS AND CAPITAL
IMPROVEMENTS NECESSARY TO PRESERVE THE PREMISES, BUILDING AND COMMON AREAS
IN GOOD WORKING ORDER AND IN A CLEAN, SAFE AND SANITARY CONDITION,
INCLUDING, WITHOUT LIMITATION:
(a) ALL STRUCTURAL COMPONENTS OF THE BUILDING, INCLUDING THE ROOF, EXTERIOR LOAD BEARING WALLS, FOOTINGS FOUNDATION, COLUMNS, BEAMS AND FLOOR AND CEILING SLABS;
(b) all Building doors, exterior and interior glass, windows locks, loading docks (including dock doors and related equipment) and signage;
(c) all roof-top HVAC units (and related component equipment);
(d) all electrical, mechanical, HVAC, fire protection, sprinkler, plumbing, and telecommunications systems (including all component facilities, fixtures and devices) located within the Building; and Building elevators (if any);
(e) all utility and other systems serving the Building (and component equipment) including water, sewer, natural gas, electric, fuel, oil, steam and chilled water;
(f) all elevators, columns, beams, shafts (including elevator shafts), stairs, stairwells, paved parking areas, driveways, sidewalks and curbs;
(g) janitorial and cleaning services; trash, garbage and refuse removal; and pest extermination;
(h) landscaping and grounds maintenance, including lawn moving, tree pruning, annual flower planting, snow plowing and sweeping of the parking
lot; and the maintenance and repair (and replacement) of any existing irrigation system; and
(i) all Building and Premises security as required by Tenant (in its discretion) for its own business operations.
8.2.2 LANDLORD'S SERVICES. DURING THE TERM LANDLORD SHALL PROVIDE THE
SERVICES STATED IN SECTION 6.1 HEREOF, AT TENANT'S EXPENSE, AND SUCH
PERFORMANCE BY LANDLORD SHALL FULFILL TENANT'S OBLIGATIONS UNDER SUBSECTION
8.2.1 WITH RESPECT TO THOSE ITEMS.
8.2.3 LANDLORD'S RIGHT TO PERFORM. TENANT SHALL ALSO REPAIR, AT ITS
COST, ALL DETERIORATIONS OR DAMAGES TO THE PROPERTY OCCASIONED BY ITS
NEGLIGENT ACTS OR OMISSIONS OR WILLFUL MISCONDUCT. IF TENANT DOES NOT MAKE
REPAIRS TO THE PROPERTY THAT ARE TENANT'S RESPONSIBILITY UNDER THIS SECTION
8.2 WITHIN THIRTY (30) DAYS FOLLOWING DEFAULT NOTICE FROM LANDLORD,
LANDLORD MAY, BUT NEED NOT, MAKE SUCH REPAIRS, AND TENANT SHALL PAY THE
COST THEREOF AS PROVIDED IN SECTION 7.6 HEREOF. ALL REPAIRS AND
REPLACEMENTS MADE BY OR ON BEHALF OF TENANT SHALL BE MADE AND PERFORMED IN
ACCORDANCE WITH THE "Construction Standards" (AS DEFINED IN SECTION 8.3).
8.2.3 Replacements. Tenant's obligations to maintain and repair the Property includes the responsibility for all capital repairs and capital replacements, excluding those matters that comprise Landlord's Replacement Obligations. The HVAC units that are used by Tenant for its assembly or manufacturing processes and which are not subject to Landlord's Replacement Obligations (the "TENANT HVAC UNITS") are also identified in Exhibit H attached hereto; Tenant is responsible for the maintenance, repair and replacement of such Tenant HVAC Units at Tenant's sole expense.
8.2.4 Construction of Additional Parking Spaces. Tenant acknowledges
that: (a) the Town of Branford (the "TOWN") Planning and Zoning
Commission's approval of Tenant's application to construct the Building and
related site improvements, as evidenced by its Notice of Decision dated
April 17, 1998, permitted a temporary waiver of Tenant's obligation to
construct twelve (12) of the required parking spaces (the "DEFERRED PARKING
SPACES"), and (b) such waiver is effective until the Town issues a notice
requiring the construction of such Deferred Parking Spaces at the Property
(the "DEFERRED PARKING CONSTRUCTION NOTICE"), at which time the owner of
the Property must construct the Deferred Parking Spaces in compliance with
the Town's requirements and applicable laws. Landlord and Tenant agree that
if the Town issues a Deferred Parking Construction Notice during the Term,
(i) Landlord will comply with the requirements thereof to construct the
Deferred Parking Spaces on the Property, and (ii) Tenant shall reimburse
Landlord for all of the actual "hard" and "soft" costs and expenses paid by
Landlord in connection with the work required to comply with the Deferred
Parking Construction Notice and construct the Deferred Parking Spaces,
inclusive of any related grading and site work, (the "PARKING CONSTRUCTION
EXPENSES"), and such payments shall constitute Additional Rent hereunder
and shall be due and payable not later than thirty (30) days following
completion of the Deferred Parking Spaces and Landlord's delivery of its
billing statement to Tenant for the Parking Construction Expenses.
8.2.5 Tenant's Roof Repairs. Notwithstanding anything contained in
Section 6.1 of this Lease to the contrary, Tenant, at its sole expense, and
in accordance with the applicable terms and conditions of the existing
Building roof warranty, shall complete the construction work necessary to
repair and correct the following roof conditions and components not later
than October 31, 2007: (a) open seams, (b) open t-patches, (c) open
corners, (d) flashing, and (e) caulking, which items are identified in that
certain letter from M. Gottfried, Inc. to Davis Marcus Management, Inc.
dated July 9, 2007 referenced as "Roof Report 44 East Industrial Road,
Branford, Connecticut" (the "TENANT ROOF REPAIRS"). The Tenant Roof Repairs
shall be done in a good and workmanlike manner by a roofing contractor
licensed in the State of
Connecticut that is approved by the manufacturer of the Building roof as qualified to perform such work such that the Building roof warranty is not adversely affected in any respect on account of the performance of such work and otherwise in compliance with the terms and conditions of this Lease. Landlord shall thereafter be responsible during the Term for roofing repairs of this type pursuant to its obligations under Section 6.1 of this Lease, and the expenses incurred by Landlord in connection therewith shall constitute Operating Expenses for which Landlord has the right to reimbursement from Tenant pursuant to Sections 5.1 and 5.2 of this Lease, subject to the operation of Section 8.1 hereof to the extent that any matters affecting the roofing or flashing may constitute Landlord's Replacement Obligations.
8.2.6 Tenant's Parking Facility Repairs. Notwithstanding anything contained in Section 6.1 of this Lease to the contrary, Tenant, at its sole expense, shall complete the construction work necessary to patch, seal and repair all paved parking areas and driveways at the Property not later than October 31, 2007, (the "TENANT PAVING REPAIRS"). The Tenant Paving Repairs shall be done in a good and workmanlike manner by a paving contractor licensed in the State of Connecticut and otherwise in compliance with the terms and conditions of this Lease. Landlord shall thereafter be responsible during the Term for repairs of the asphalt paved parking areas and driveways of this type pursuant to its obligations under Section 6.1 of this Lease, and the expenses incurred by Landlord in connection therewith shall constitute Operating Expenses for which Landlord has the right to reimbursement from Tenant pursuant to Sections 5.1 and 5.2 of this Lease.
8.3 Tenant's Alterations.
8.3.1 LANDLORD'S CONSENT FOR ALTERATIONS. TENANT SHALL NOT MAKE OR
PERMIT ANY IMPROVEMENTS, INSTALLATIONS, ALTERATIONS OR ADDITIONS
("Alterations") IN OR TO THE PREMISES, THE BUILDING OR THE PROPERTY THAT
INVOLVE OR AFFECT THE ROOF OR ANY STRUCTURAL PORTIONS OF THE PREMISES OR
THE BUILDING (THE "Building Structure") OR ANY OF THE BUILDING'S HVAC,
MECHANICAL, ELECTRICAL, TELECOMMUNICATIONS, CABLING, PLUMBING OR OTHER
SYSTEMS OR EQUIPMENT (THE "Building Systems"). TENANT MAY MAKE ALTERATIONS
TO THE PREMISES THAT DO NOT INVOLVE OR AFFECT THE BUILDING STRUCTURE OR THE
BUILDING SYSTEMS, SUBJECT TO LANDLORD'S PRIOR WRITTEN CONSENT. LANDLORD'S
PRIOR WRITTEN CONSENT SHALL NOT BE REQUIRED FOR MINOR, NON-STRUCTURAL
ALTERATIONS IN THE PREMISES FOR WHICH TENANT PROVIDES ADVANCE NOTICE TO
LANDLORD AND WHICH DO NOT EXCEED $75,000.00 IN THE AGGREGATE ON AN ANNUAL
BASIS. AT THE EXPIRATION OF THE TERM, LANDLORD MAY REQUIRE THE REMOVAL OF
ANY OR ALL OF SAID ALTERATIONS AND THE RESTORATION OF THE PREMISES AND THE
PROPERTY TO THEIR PRIOR CONDITION, AT TENANT'S EXPENSE IN ACCORDANCE WITH
SECTION 8.5.
8.3.2 CONSTRUCTION STANDARDS. ALL ALTERATIONS MADE BY OR ON BEHALF OF
TENANT SHALL BE MADE AND PERFORMED: (A) AT TENANT'S COST AND EXPENSE AND AT
SUCH TIME AND IN SUCH MANNER AS LANDLORD MAY DESIGNATE, (B) BY CONTRACTORS
OR MECHANICS APPROVED BY LANDLORD, WHO SHALL CARRY LIABILITY INSURANCE OF A
TYPE AND IN SUCH AMOUNTS AS LANDLORD SHALL REASONABLY REQUIRE, NAMING
LANDLORD (AND ITS AFFILIATED MANAGEMENT COMPANY) AND TENANT AS ADDITIONAL
INSUREDS, (C) IN A GOOD AND WORKMANLIKE MANNER, (D) SO THAT SAME SHALL BE
AT LEAST EQUAL IN QUALITY, VALUE, AND UTILITY TO THE ORIGINAL WORK OR
INSTALLATION, (E) IN ACCORDANCE WITH THE RULES AND REGULATIONS FOR THE
BUILDING ADOPTED BY LANDLORD FROM TIME TO TIME AND IN ACCORDANCE WITH ALL
APPLICABLE LAWS, AND (F) PURSUANT TO PLANS, DRAWINGS AND SPECIFICATIONS
("Tenant's Plans") WHICH HAVE BEEN REVIEWED AND APPROVED BY LANDLORD PRIOR
TO THE COMMENCEMENT OF THE REPAIRS OR REPLACEMENTS AND APPROVED BY, AND
FILED WITH, ALL APPLICABLE GOVERNMENTAL AUTHORITIES, AND SUBJECT TO ALL
OTHER TERMS AND CONDITIONS OF THIS LEASE, INCLUDING, BUT NOT LIMITED TO,
SECTION 7.5 (COLLECTIVELY THE "Construction Standards"). ALL ALTERATIONS
MADE BY TENANT SHALL BECOME, UPON INSTALLATION, THE PROPERTY OF LANDLORD
AND REMAIN UPON AND BE SURRENDERED WITH THE PREMISES AT THE EXPIRATION OF
THE LEASE TERM, UNLESS LANDLORD
REQUIRES THEIR REMOVAL PURSUANT TO SECTION 8.5. LANDLORD AGREES NOT TO
UNREASONABLY WITHHOLD ANY APPROVALS REQUESTED UNDER THIS SUBSECTION 8.3.2.
8.4 Tenant's Property. TENANT'S TRADE FIXTURES, FURNISHINGS, EQUIPMENT, WIRING AND PERSONAL PROPERTY PLACED IN THE PREMISES (THE "Tenant's PROPERTY") SHALL BE REMOVED BY TENANT, AT TENANT'S COST AND EXPENSE, AT THE EXPIRATION OF THE TERM. IN CONNECTION WITH SUCH REMOVAL, TENANT SHALL REPAIR ANY DAMAGE TO THE PREMISES OR THE BUILDING CAUSED BY SUCH REMOVAL. ANY OF TENANT'S PROPERTY NOT REMOVED FROM THE PREMISES PRIOR TO THE EXPIRATION DATE SHALL, AT LANDLORD'S OPTION, BECOME THE PROPERTY OF LANDLORD OR LANDLORD MAY REMOVE SUCH TENANT'S PROPERTY, AND TENANT SHALL PAY TO LANDLORD, LANDLORD'S COST OF REMOVAL AND OF ANY REPAIRS IN CONNECTION THEREWITH IN ACCORDANCE WITH SUBSECTION 4.4.2 HEREOF.
8.5 Ownership and Removal. ALL APPURTENANCES, ADDITIONS, FIXTURES AND
IMPROVEMENTS ATTACHED TO OR INSTALLED IN OR UPON THE PREMISES, WHETHER PLACED
THERE BY TENANT OR BY LANDLORD, SHALL BE LANDLORD'S PROPERTY AND SHALL REMAIN
UPON THE PREMISES AT THE TERMINATION OF THIS LEASE BY LAPSE OF TIME OR OTHERWISE
WITHOUT COMPENSATION OR ALLOWANCE OR CREDIT TO TENANT. LANDLORD MAY REQUIRE
TENANT, AT TENANT'S EXPENSE, TO REMOVE ANY OF TENANT'S PROPERTY OR ALTERATIONS
WHICH HAVE BEEN ATTACHED TO OR INSTALLED IN THE PREMISES UNLESS LANDLORD
CONSENTS TO A WRITTEN REQUEST FROM TENANT AT THE TIME OF ITS APPROVAL OF THE
TENANT'S PLANS THAT A BUILDING STANDARD, NON-SPECIALTY INSTALLATION NEED NOT BE
SO REMOVED. IF TENANT FAILS TO REMOVE ANY TENANT PROPERTY OR ALTERATIONS THAT
TENANT IS REQUIRED TO REMOVE PURSUANT TO THIS SECTION 8.5 BY THE EXPIRATION
DATE, OR THE SOONER DATE OF TERMINATION OF THIS LEASE, THEN LANDLORD MAY REMOVE
THE SAME AND TENANT SHALL PAY TO LANDLORD THE COST OF SUCH REMOVAL AND THE COST
OF ANY REPAIRS OF ANY DAMAGE TO THE PREMISES OR BUILDING IN CONNECTION
THEREWITH.
8.6 Surrender. UPON THE EXPIRATION OR SOONER TERMINATION OF THE TERM, TENANT WILL QUIETLY AND PEACEFULLY SURRENDER TO LANDLORD THE PREMISES IN AS GOOD CONDITION AS THE PREMISES WERE IN AS OF THE COMMENCEMENT DATE, ORDINARY WEAR AND TEAR EXCEPTED, AND OTHERWISE AS IS REQUIRED IN ARTICLE 8. IN ADDITION, AT SUCH TIME TENANT SHALL REMOVE ALL HAZARDOUS SUBSTANCES STORED, OR DISPOSED OF, OR GENERATED BY TENANT IN ITS USE OR OPERATION OF THE PREMISES AND ALL EQUIPMENT AND MATERIALS CONTAMINATED OR AFFECTED BY SUCH HAZARDOUS SUBSTANCES IN CONFORMITY WITH THE HAZARDOUS SUBSTANCE LAWS. TENANT SHALL SURRENDER THE PREMISES TO LANDLORD AT THE END OF THE TERM HEREOF, WITHOUT NOTICE OF ANY KIND, AND TENANT WAIVES ALL RIGHT TO ANY SUCH NOTICE AS MAY BE PROVIDED UNDER ANY LAWS NOW OR HEREAFTER IN EFFECT IN CONNECTICUT.
8.7 Tenant's Failure to Maintain. IF LANDLORD GIVES TENANT WRITTEN DEFAULT
NOTICE OF THE NECESSITY OF ANY REPAIRS OR REPLACEMENTS REQUIRED TO BE MADE UNDER
SECTION 8.2 AND TENANT FAILS TO COMMENCE DILIGENTLY TO CURE THE SAME WITHIN
THIRTY (30) DAYS THEREAFTER (EXCEPT THAT NO NOTICE WILL BE REQUIRED IN CASE OF
ANY EMERGENCY REPAIR OR REPLACEMENT NECESSARY TO PREVENT SUBSTANTIAL DAMAGE OR
DETERIORATION), AND SUCH ADDITIONAL CURE PERIOD AS MAY BE PERMITTED UNDER THE
DEFAULT SECTION OF THIS LEASE, IF THE NATURE OF REPAIR AND REPLACEMENT REQUIRES
AN ADDITIONAL PERIOD TO COMPLETE, LANDLORD, AT ITS OPTION AND IN ADDITION TO ANY
OTHER REMEDIES, MAY PROCEED TO MAKE SUCH REPAIRS OR REPLACEMENTS AND THE
EXPENSES INCURRED BY LANDLORD IN CONNECTION THEREWITH PLUS TEN PERCENT (10%)
THEREOF FOR LANDLORD'S SUPERVISION, SHALL BE DUE AND PAYABLE FROM TENANT IN
ACCORDANCE WITH SECTION 4.4 HEREOF, AS ADDITIONAL RENT; PROVIDED, THAT,
LANDLORD'S MAKING ANY SUCH REPAIRS OR REPLACEMENTS SHALL NOT BE DEEMED A WAIVER
OF TENANT'S DEFAULT IN FAILING TO MAKE THE SAME.
ARTICLE 9 INSURANCE
9.1 Tenant's Insurance. TENANT, AT ITS OWN EXPENSE, SHALL PROVIDE AND KEEP IN FORCE WITH COMPANIES WHICH ARE RATED A/XV OR BETTER BY A.M. BEST COMPANY AND LICENSED IN THE STATE OF CONNECTICUT: (A) COMBINED SINGLE LIMIT COMMERCIAL GENERAL LIABILITY
INSURANCE INSURING AGAINST LIABILITY FOR BODILY INJURY AND PROPERTY DAMAGE, INCLUDING CONTRACTUAL LIABILITY, IN THE AMOUNT OF $2,000,000.00 PER OCCURRENCE/$4,000,000.00 ANNUAL AGGREGATE LIMIT; (B) "SPECIAL FORM" PROPERTY INSURANCE, INCLUDING STANDARD FIRE AND EXTENDED COVERAGE INSURANCE, IN AMOUNTS NECESSARY TO PROVIDE REPLACEMENT COST COVERAGE, FOR TENANT'S PROPERTY, MACHINERY, ELECTRONIC DATA, FURNITURE, FURNISHINGS AND ANY ALTERATIONS IN WHICH TENANT HAS AN INSURABLE PROPERTY INTEREST, INCLUDING, WITHOUT LIMITATION, VANDALISM AND MALICIOUS MISCHIEF AND SPRINKLER LEAKAGE COVERAGE, AND "ALL RISK" BUILDER'S RISK INSURANCE, COMPLETED VALUE, NON-REPORTING FORM AT ANY TIME THAT TENANT HAS COMMENCED CONSTRUCTION OF ANY LEASEHOLD IMPROVEMENTS OR ANY ALTERATIONS, AND AT ANY TIME ANY OTHER CONSTRUCTION ACTIVITIES ARE UNDERWAY AT THE PREMISES; (C) PLATE GLASS INSURANCE FOR THE PREMISES; (D) WORKERS' COMPENSATION INSURANCE IN STATUTORY LIMITS AS REQUIRED BY APPLICABLE LAW; AND (E) ANY OTHER INSURANCE REASONABLY REQUIRED BY LANDLORD. AT LANDLORD'S REQUEST, THE AMOUNTS AND KINDS OF INSURANCE COVERAGES DESCRIBED HEREIN MAY BE REASONABLY INCREASED OR EXPANDED TO REFLECT (I) AMOUNTS AND COVERAGES THEN TYPICALLY BEING CARRIED FOR SIMILAR BUSINESS OPERATIONS IN INSTITUTIONALLY OWNED OR FINANCED PROPERTIES; OR (II) AMOUNTS AND COVERAGE REQUIRED BY LANDLORD'S MORTGAGEE.
9.2 Delivery of Policies. EACH SUCH INSURANCE POLICY SHALL (A) BE PROVIDED IN FORM, SUBSTANCE AND AMOUNTS (WHERE NOT ABOVE STATED) SATISFACTORY TO LANDLORD AND TO LANDLORD'S MORTGAGEE; (B) SPECIFICALLY INCLUDE THE LIABILITY ASSUMED HEREUNDER BY TENANT (PROVIDED THAT THE AMOUNT OF SUCH INSURANCE SHALL NOT BE CONSTRUED TO LIMIT THE LIABILITY OF TENANT HEREUNDER); (C) PROVIDE THAT IT IS PRIMARY INSURANCE, AND NOT EXCESS OVER OR CONTRIBUTORY WITH ANY OTHER VALID, EXISTING AND APPLICABLE INSURANCE IN FORCE FOR OR ON BEHALF OF LANDLORD; AND (D) PROVIDE THAT LANDLORD SHALL RECEIVE THIRTY (30) DAYS' WRITTEN NOTICE FROM THE INSURER PRIOR TO ANY CANCELLATION OR CHANGE OF COVERAGE. TENANT SHALL DELIVER POLICIES OF SUCH INSURANCE OR CERTIFICATES THEREOF TO LANDLORD ON OR BEFORE THE COMMENCEMENT DATE, AND THEREAFTER AT LEAST THIRTY (30) DAYS BEFORE THE EXPIRATION DATES OF EXPIRING POLICIES. ALL SUCH INSURANCE CERTIFICATES SHALL PROVIDE THAT LANDLORD, ITS MORTGAGEES, ANY GROUND LESSORS AND LANDLORD'S MANAGING AGENT SHALL EACH BE NAMED AS AN ADDITIONAL INSURED.
9.3 Increased Insurance Risk. TENANT SHALL NOT DO OR PERMIT ANYTHING TO BE
DONE, OR KEEP OR PERMIT ANYTHING TO BE KEPT IN THE PREMISES, WHICH WOULD: (A) BE
IN VIOLATION OF ANY GOVERNMENTAL LAW, REGULATION OR REQUIREMENT, (B) INVALIDATE
OR BE IN CONFLICT WITH THE PROVISION OF ANY FIRE OR OTHER INSURANCE POLICIES
COVERING THE BUILDING OR ANY PROPERTY LOCATED THEREIN, (C) RESULT IN A REFUSAL
BY FIRE INSURANCE COMPANIES OF GOOD STANDING TO INSURE THE BUILDING OR ANY SUCH
PROPERTY IN AMOUNTS REQUIRED BY LANDLORD'S MORTGAGEE (AS HEREINAFTER DEFINED) OR
REASONABLY SATISFACTORY TO LANDLORD, (D) SUBJECT LANDLORD TO ANY LIABILITY OR
RESPONSIBILITY FOR INJURY TO ANY PERSON OR PROPERTY BY REASON OF ANY BUSINESS
OPERATION BEING CONDUCTED IN THE PREMISES, OR (E) CAUSE ANY INCREASE IN THE FIRE
INSURANCE RATES APPLICABLE TO THE PROPERTY OR PROPERTY LOCATED THEREIN AT THE
BEGINNING OF THE TERM OR AT ANY TIME THEREAFTER. TENANT, AT TENANT'S EXPENSE,
SHALL COMPLY WITH ALL RULES, ORDERS, REGULATIONS OR REQUIREMENTS OF THE
INSURANCE SERVICES OFFICE ("ISO") AND WITH ANY SIMILAR BODY THAT SHALL HEREAFTER
PERFORM THE FUNCTION OF THE ISO. IN THE EVENT THAT ANY USE OF THE PREMISES BY
TENANT INCREASES SUCH COST OF INSURANCE, LANDLORD SHALL GIVE TENANT WRITTEN
NOTICE OF SUCH INCREASE AND A REASONABLE OPPORTUNITY TO CURE ITS USE TO PREVENT
SUCH INCREASE; PROVIDED, HOWEVER, IF TENANT FAILS TO DO SO, TENANT SHALL PAY
SUCH INCREASED COST TO LANDLORD IN ACCORDANCE WITH SECTION 4.4 HEREOF.
ACCEPTANCE OF SUCH PAYMENT SHALL NOT BE CONSTRUED AS A CONSENT BY LANDLORD TO
TENANT'S SUCH USE, OR LIMIT LANDLORD'S REMEDIES UNDER THIS LEASE.
9.4 Tenant's Indemnity. TENANT SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD, ALL MEMBERS, OFFICERS, DIRECTORS, PARTNERS, OF LANDLORD, MORTGAGEES OF THE PROPERTY FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES), CAUSES OF ACTION, SUITS, CLAIMS, DEMANDS OR JUDGMENTS OF ANY NATURE ARISING FROM OR WITH RESPECT TO (A) ANY INJURY TO OR
DEATH OF ANY PERSON OR DAMAGE TO OR LOSS OF PROPERTY IN, ON OR ABOUT THE PREMISES OR CONNECTED WITH THE USE, CONDITION OR OCCUPANCY OF ANY THEREOF, (B) ANY BREACH OR VIOLATION BY TENANT OF ANY OF THE TERMS, CONDITIONS OR PROVISIONS OF THIS LEASE, (C) ANY ACT, OMISSION, FAULT, MISCONDUCT, NEGLIGENCE OR VIOLATION OF APPLICABLE LAWS AND REGULATIONS BY TENANT OR ANY TENANT PARTIES; (D) ANY HAZARDOUS SUBSTANCES OR OTHER POLLUTANTS BROUGHT, GENERATED, STORED, USED, INSTALLED, DISPOSED OF, SPILLED, RELEASED, EMITTED OR DISCHARGED ON, IN OR FROM THE PREMISES OR THE PROPERTY, WHICH HAZARDOUS SUBSTANCES WERE RELEASED BY TENANT OR ANY TENANT PARTIES, IN VIOLATION OF SECTION 7.6 OR OTHERWISE, (E) ANY CONSTRUCTION OR OTHER WORK BY TENANT ON OR ABOUT THE PREMISES PURSUANT TO ARTICLE 8 OR OTHERWISE, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BREACH OF LEASE BY LANDLORD, ITS AGENTS, EMPLOYEES OR CONTRACTORS. IN CASE ANY ACTION, SUIT OR PROCEEDING IS BROUGHT AGAINST LANDLORD BY REASON OF ANY SUCH OCCURRENCE, TENANT WILL, AT TENANT'S EXPENSE, RESIST AND DEFEND SUCH ACTION, SUIT OR PROCEEDING OR CAUSE THE SAME TO BE RESISTED OR DEFENDED BY COUNSEL REASONABLY APPROVED BY LANDLORD. THE FOREGOING INDEMNITY SHALL NOT APPLY TO ANY LIABILITY ASSERTED BY AN INDEMNIFIED PARTY IDENTIFIED HEREIN IF SUCH INDEMNIFIED PARTY IS RESPONSIBLE FOR THE LIABILITIES THAT ARE ASSERTED AGAINST THE INDEMNIFYING PARTY.
9.5 Tenant's Use and Occupancy. TENANT'S USE AND OCCUPANCY OF THE PREMISES
AND THE PROPERTY AND USE BY ALL TENANT PARTIES, AND ALL TENANT'S AND SAID
PARTIES' FURNISHINGS, FIXTURES, EQUIPMENT, IMPROVEMENTS, MATERIALS, SUPPLIES,
INVENTORY, EFFECTS AND PROPERTY OF EVERY KIND, NATURE AND DESCRIPTION WHICH,
DURING THE CONTINUANCE OF THIS LEASE OR ANY OCCUPANCY OF THE PREMISES BY TENANT
OR ANYONE CLAIMING UNDER TENANT, MAY BE IN, ON OR ABOUT THE PREMISES, SHALL BE
AT TENANT'S AND SAID PARTIES' SOLE RISK AND HAZARD, EXCEPT TO THE EXTENT CAUSED
BY THE WILLFUL MISCONDUCT, GROSS NEGLIGENCE OR BREACH OF LEASE BY LANDLORD, ITS
AGENTS, EMPLOYEES OR CONTRACTORS. LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY
OTHER PARTY FOR INJURY TO OR DEATH OF ANY PERSON OR DAMAGE TO OR DESTRUCTION OF
ANY PROPERTY IN, ON OR ABOUT THE PREMISES, NOR FOR ANY INTERRUPTION IN TENANT'S
USE OF THE PREMISES OR THE CONDUCT OF ITS BUSINESS THEREIN, NOR FOR ANY OTHER
LOSSES, DAMAGES, COSTS, EXPENSES OR LIABILITIES WHATSOEVER, INCLUDING WITHOUT
LIMITATION WHERE CAUSED BY FIRE, WATER, EXPLOSION, COLLAPSE, THE LEAKAGE OR
BURSTING OF WATER, STEAM, OR OTHER PIPES, ANY ENVIRONMENTAL OR OTHER CONDITION
IN, ON, OR ABOUT THE PREMISES, OR ANY OTHER EVENT, OCCURRENCE, CONDITION OR
CAUSE, EXCEPT TO THE EXTENT CAUSED BY THE WILLFUL MISCONDUCT, GROSS NEGLIGENCE
OR BREACH OF LEASE BY LANDLORD, ITS AGENTS, EMPLOYEES OR CONTRACTORS.
9.6 Waiver of Claims.
9.6.1 MUTUAL WAIVER. LANDLORD AND TENANT HEREBY AGREE AND HEREBY WAIVE ANY AND ALL RIGHTS OF RECOVERY AGAINST EACH OTHER FOR LOSS OR DAMAGE OCCURRING TO THE PREMISES OR THE PROPERTY OR ANY OF LANDLORD'S OR TENANT'S PROPERTY CONTAINED THEREIN REGARDLESS OF THE CAUSE OF SUCH LOSS OR DAMAGE TO THE EXTENT THAT THE LOSS OR DAMAGE IS COVERED BY THE INJURED PARTY'S INSURANCE OR THE INSURANCE THE INJURED PARTY IS REQUIRED TO CARRY UNDER THIS LEASE, WHICHEVER IS GREATER (WITHOUT REGARD TO ANY DEDUCTIBLE PROVISION IN ANY POLICY). THIS WAIVER DOES NOT APPLY TO CLAIMS CAUSED BY A PARTY'S WILLFUL MISCONDUCT. THIS WAIVER ALSO APPLIES TO EACH PARTY'S DIRECTORS, OFFICERS, EMPLOYEES, SHAREHOLDERS, AND AGENTS.
9.6.2 INSURANCE POLICY COVERAGE. EACH PARTY WILL ASSURE THAT ITS INSURANCE PERMITS WAIVER OF LIABILITY AND CONTAINS A WAIVER OF SUBROGATION. EACH PARTY SHALL SECURE AN APPROPRIATE CLAUSE IN, OR AN ENDORSEMENT TO, EACH INSURANCE POLICY OBTAINED BY OR REQUIRED TO BE OBTAINED BY LANDLORD OR TENANT, AS THE CASE MAY BE, UNDER THIS LEASE, PURSUANT TO WHICH THE INSURANCE COMPANY: (A) WAIVES ANY RIGHT OF SUBROGATION AGAINST LANDLORD OR TENANT AS THE SAME MAY BE APPLICABLE, OR (B) PERMITS LANDLORD OR TENANT, PRIOR TO ANY LOSS TO AGREE TO WAIVE
ANY CLAIM IT MIGHT HAVE AGAINST THE OTHER WITHOUT INVALIDATING THE COVERAGE UNDER THE INSURANCE POLICY. IF, AT ANY TIME, THE INSURANCE CARRIER OF EITHER PARTY REFUSES TO WRITE (AND NO OTHER INSURANCE CARRIER LICENSED IN CONNECTICUT WILL WRITE) INSURANCE POLICIES WHICH CONSENT TO OR PERMIT SUCH RELEASE OF LIABILITY, THEN SUCH PARTY SHALL NOTIFY THE OTHER PARTY AND UPON THE GIVING OF SUCH NOTICE, THIS SECTION SHALL BE VOID AND OF NO EFFECT.
9.7 Property Insurance. LANDLORD SHALL MAINTAIN AND KEEP IN EFFECT DURING THE ENTIRE TERM THE FOLLOWING INSURANCE COVERAGES, (TOGETHER WITH SUCH OTHER COVERAGES AS LANDLORD MAY REASONABLY ELECT TO CARRY FOR THE BENEFIT OF THE PROPERTY) AT TENANT'S COST AND EXPENSE AND SUBJECT TO TENANT'S REIMBURSEMENT THEREOF AS AN OPERATING EXPENSE UNDER ARTICLE 5 HEREOF:
(A) COMMERCIAL GENERAL LIABILITY INSURANCE WITH A BROAD FORM ENDORSEMENT. THE LIMITS OF LIABILITY OF SUCH INSURANCE SHALL BE AN AMOUNT NOT LESS THAN $5,000,000.00 PER OCCURRENCE, BODILY INJURY INCLUDING DEATH, AND $5,000,000.00 PER OCCURRENCE, PROPERTY DAMAGE LIABILITY OR $5,000,000 COMBINED SINGLE LIMIT FOR BODILY INJURY AND PROPERTY DAMAGE LIABILITY; AND
(B) "SPECIAL FORM" FIRE AND EXTENDED COVERAGE INSURANCE ON THE PROPERTY INSURING THE GUARANTEED REPLACEMENT VALUE THEREOF, EXCLUDING TENANT'S PROPERTY AND TENANT'S ALTERATIONS; AND RENTAL LOSS INSURANCE OF NOT LESS THAN TWELVE (12) MONTH OF RENTALS PAYABLE UNDER LEASES. THE INSURANCE SHALL INCLUDE, BUT NOT BE LIMITED TO, FIRE AND EXTENDED COVERAGE PERILS AND SHALL BE PLACED WITH COMPANIES LICENSED TO SELL INSURANCE IN CONNECTICUT, AND RATED IN BEST'S INSURANCE GUIDE AS HAVING A GENERAL POLICYHOLDER RATED OF "B+" AND A FINAL RATING OF AT LEAST "XII". ALL POLICIES SHALL BE SUBJECT TO COMMERCIALLY REASONABLE DEDUCTIBLES.
9.8 LANDLORD'S INDEMNITY. Landlord agrees to indemnify and save harmless Tenant and any of the Tenant Parties from and against any and all loss, cost, liability, damage and expense including, without limitation, claims, demands, penalties, causes of action, costs and expenses and attorneys' fees imposed upon and incurred by or asserted against Tenant from any cause in, on or about the Property, including, without limitation, those relating to the following: (a) Landlord's default in its observance or performance of any of the terms, covenants or conditions of this Lease, (b) any acts, omissions or negligence of Landlord or any of Landlord's officers, employees, agents or contractors (the "LANDLORD PARTIES"), in, on or about the Common Areas and Property (excluding Building) during the Term, or (c) for personal injury, death or property damage, occasioned by any condition, occurrence, or negligence referred to in the preceding clauses. In case any action, suit or proceeding is brought against Tenant by reason of any such occurrence, Landlord will, at Landlord's expense, resist and defend such action, suit or proceeding or cause the same to be resisted or defended by counsel reasonably approved by Tenant. The foregoing indemnity shall not apply to any liability asserted by an indemnified party identified herein if such indemnified party is responsible for the liabilities that are asserted against the indemnifying party.
ARTICLE 10 CASUALTY
10.1 Damage or Destruction.
10.1.1 LANDLORD'S REPAIR OBLIGATION. TENANT SHALL GIVE PROMPT NOTICE TO LANDLORD OF ANY DAMAGE BY FIRE OR OTHER CASUALTY (A "Casualty") TO THE PREMISES OR ANY PORTION THEREOF. DURING THE THIRTY (30) DAY PERIOD FOLLOWING THE OCCURRENCE OF A CASUALTY (THE "Notice Period"), LANDLORD WILL NOTIFY TENANT OF LANDLORD'S ESTIMATE OF THE PERIOD OF TIME REQUIRED TO COMPLETE THE RESTORATION WORK BASED UPON REVIEW OF THE CASUALTY BY AN INDEPENDENT CONTRACTOR OR ARCHITECT SELECTED BY LANDLORD (THE "Restoration Estimate"). IF THE DAMAGE IS OF SUCH A NATURE THAT IT CAN BE REASONABLY REPAIRED BY LANDLORD WITHIN SIXTY (60) DAYS AFTER THE CASUALTY, LANDLORD SHALL IMMEDIATELY PROCEED TO REPAIR SUCH DAMAGE WITHOUT THE NECESSITY OF A NOTICE PERIOD. IN THE EVENT THAT THE PREMISES, OR ANY PART THEREOF, OR ACCESS THERETO, SHALL
BE SO DAMAGED OR DESTROYED BY FIRE OR OTHER INSURED CASUALTY THAT THE TENANT SHALL NOT HAVE REASONABLY CONVENIENT ACCESS TO THE PREMISES OR ANY PORTION OF THE PREMISES SHALL THEREBY BE OTHERWISE RENDERED UNFIT FOR USE AND OCCUPANCY BY THE TENANT FOR THE PURPOSES SET FORTH IN SECTION 7.1, AND IF, BASED ON THE RESTORATION ESTIMATE, THE DAMAGE OR DESTRUCTION MAY BE REPAIRED WITHIN TWO HUNDRED TWENTY-FIVE (225) DAYS, THEN THE LANDLORD SHALL SO NOTIFY THE TENANT AND SHALL REPAIR SUCH DAMAGE OR DESTRUCTION AS PROVIDED IN SECTION 10.5 HEREOF WITH REASONABLE DILIGENCE, SUBJECT TO THE LIMITATIONS, IF ANY, OF APPLICABLE LAWS. IF THE RESTORATION ESTIMATE DISCLOSES THAT THE PREMISES, OR MEANS OF ACCESS THERETO, CANNOT BE REPAIRED WITHIN TWO HUNDRED TWENTY-FIVE (225) DAYS AFTER THE ELAPSE OF THE NOTICE PERIOD, THEN EITHER PARTY SHALL HAVE THE RIGHT TO TERMINATE THE TERM OF THIS LEASE BY GIVING WRITTEN NOTICE OF SUCH TERMINATION TO THE OTHER PARTY WITHIN THE PERIOD OF SIXTY (60) TO SEVENTY-FIVE (75) DAYS AFTER THE OCCURRENCE OF THE CASUALTY. IF THE RECONSTRUCTION PERIOD SET FORTH IN THE RESTORATION ESTIMATE IS MORE THAN TWO HUNDRED TWENTY-FIVE (225) DAYS AND NEITHER PARTY TERMINATES THIS LEASE ON ACCOUNT THEREOF, LANDLORD SHALL REPAIR SUCH DAMAGE OR DESTRUCTION AS PROVIDED IN SECTION 10.4 HEREOF , SUBJECT TO THE LIMITATIONS, IF ANY, OF APPLICABLE LAWS TO BE THE PERIOD SO ESTIMATED BY LANDLORD.
10.1.2 FAILURE TO COMPLETE REPAIRS; RIGHTS OF TERMINATION. IN THE
EVENT THAT THE LANDLORD BEGINS REPAIR OF THE PREMISES OR BUILDING, OR BOTH,
AS PROVIDED ABOVE AND DOES NOT COMPLETE SUCH REPAIRS WITHIN TWO HUNDRED
TWENTY-FIVE (225) DAYS AFTER THE ELAPSE OF THE NOTICE PERIOD, THEN THE
TENANT SHALL HAVE THE RIGHT TO TERMINATE THE TERM OF THIS LEASE BY GIVING
WRITTEN NOTICE OF SUCH TERMINATION TO THE LANDLORD IF LANDLORD FAILS TO
COMPLETE SUCH REPAIRS WITHIN THIRTY (30) DAYS FOLLOWING THE END OF SUCH
270-DAY PERIOD. TENANT MUST DELIVER SUCH NOTICE OF TERMINATION WITHIN TEN
(10) DAYS AFTER THE END OF SUCH THIRTY (30)-DAY PERIOD; PROVIDED, HOWEVER,
THAT: (A) IF THE RECONSTRUCTION PERIOD ESTIMATED BY LANDLORD UNDER
SUBSECTION 10.1.1 IS MORE THAN (270) DAYS AND NEITHER PARTY TERMINATES THIS
LEASE ON ACCOUNT THEREOF, THE TWO HUNDRED SEVENTY (270)-DAY PERIOD IN THIS
SUBSECTION 10.1.2 SHALL BE EXTENDED TO BE THE RECONSTRUCTION PERIOD SO
ESTIMATED BY LANDLORD PLUS ONE (1) MONTH; AND (B) IN THE EVENT THAT THE
COMPLETION OF REPAIRS SHALL BE DELAYED BY CAUSES BEYOND THE LANDLORD'S
CONTROL, INCLUDING THOSE EVENTS DESCRIBED IN SECTION 16.16 HEREOF, THE TIME
FOR COMPLETION SHALL BE EXTENDED BY THE PERIOD OF SUCH DELAY, BUT IN THE
CASE OF ANY FORCE MAJEURE DELAY, THE ADDITIONAL TIME FOR COMPLETION SHALL
NOT EXCEED NINETY (90) DAYS.
10.2 Abatement of Rent. ANNUAL BASE RENT AND ADDITIONAL RENT SHALL NOT BE ABATED OR SUSPENDED IF, FOLLOWING ANY CASUALTY, TENANT SHALL CONTINUE TO HAVE REASONABLY CONVENIENT ACCESS TO THE PREMISES, THE PREMISES ARE NOT RENDERED UNFIT FOR USE AND OCCUPANCY AND THE DAMAGE TO THE PREMISES DOES NOT MATERIALLY INTERFERE WITH THE CONDUCT OF TENANT'S BUSINESS AT THE PREMISES. IF TENANT SHALL NOT HAVE REASONABLY CONVENIENT ACCESS TO THE PREMISES OR ANY PORTION OF THE PREMISES SHALL BE OTHERWISE RENDERED UNFIT FOR USE AND OCCUPANCY BY THE TENANT FOR THE PURPOSES SET FORTH IN SECTION 7.1 BY REASON OF SUCH CASUALTY, OR THE DAMAGE MATERIALLY INTERFERES WITH THE CONDUCT OF TENANT'S BUSINESS AT THE PREMISES, THEN RENT SHALL BE EQUITABLY SUSPENDED OR ABATED RELATIVE TO THE PORTION OF THE PREMISES THAT CANNOT BE USED BY TENANT FOR ANY OF ITS BUSINESS OPERATIONS, EFFECTIVE AS OF THE DATE OF THE CASUALTY UNTIL LANDLORD HAS (A) SUBSTANTIALLY COMPLETED THE REPAIR OF THE PREMISES AND THE MEANS OF ACCESS THERETO, AND (B) HAS DELIVERED NOTICE THEREOF TO TENANT. IF SUCH DAMAGE OR DESTRUCTION WAS CAUSED BY THE NEGLIGENCE OR WILLFUL ACT OR OMISSION OF THE TENANT OR ANY OF ITS OFFICERS, EMPLOYEES, CONTRACTORS, AGENTS OR INVITEES, THEN THERE SHALL BE NO ABATEMENT OF RENT.
10.3 Events of Termination. IN ADDITION TO THE FOREGOING TERMINATION RIGHTS PROVIDED IN SECTION 10.1 HEREOF, IN THE EVENT OF A CASUALTY, THE FOLLOWING TERMINATION RIGHTS SHALL APPLY:
10.3.1 DAMAGE DURING FINAL SIX MONTHS OF TERM. IF MORE THAN THIRTY PERCENT (30%) OF THE GROSS RENTABLE AREA OF THE PREMISES SHALL BE WHOLLY OR SUBSTANTIALLY DAMAGED OR DESTROYED BY CASUALTY AT ANY TIME DURING THE LAST SIX (6) MONTHS OF THE TERM, EITHER LANDLORD OR TENANT MAY TERMINATE THIS LEASE BY DELIVERY OF WRITTEN NOTICE OF SUCH TERMINATION TO THE OTHER PARTY WITHIN THIRTY (30) DAYS AFTER THE OCCURRENCE OF SUCH DAMAGE.
10.3.2 DAMAGE IN EXCESS OF BUILDING REPLACEMENT VALUE. NOTWITHSTANDING THE PROVISIONS OF THIS ARTICLE 10, IF, PRIOR TO OR DURING THE TERM THE BUILDING SHALL BE SO DAMAGED BY CASUALTY THAT, IN LANDLORD'S REASONABLE ESTIMATE, THE COST TO REPAIR THE DAMAGE WILL BE MORE THAN THIRTY PERCENT (30%) OF THE REPLACEMENT VALUE OF THE BUILDING IMMEDIATELY PRIOR TO THE OCCURRENCE OF THE CASUALTY (WHETHER OR NOT THE PREMISES SHALL HAVE BEEN DAMAGED OR RENDERED UNTENANTABLE), THEN, IN ANY OF SUCH EVENTS, LANDLORD, AT LANDLORD'S OPTION, AND WITH THE WRITTEN CONSENT OF LANDLORD'S MORTGAGEE, MAY GIVE TO TENANT, WITHIN FORTY-FIVE (45) DAYS AFTER SUCH CASUALTY, A NINETY (90) DAYS' NOTICE OF THE TERMINATION OF THIS LEASE AND, IN THE EVENT SUCH NOTICE IS GIVEN, THIS LEASE AND THE TERM SHALL TERMINATE UPON THE EXPIRATION OF SUCH NINETY (90) DAYS WITH THE SAME EFFECT AS IF SUCH DATE WERE THE EXPIRATION DATE; AND THE RENT SHALL BE APPORTIONED AS OF SUCH DATE AND ANY PREPAID PORTION OF RENT FOR ANY PERIOD AFTER SUCH DATE SHALL BE REFUNDED BY LANDLORD TO TENANT WITHIN THIRTY (30) DAYS FOLLOWING THE EXPIRATION DATE.
10.4 Insurance Proceeds Upon Termination. IF THIS LEASE IS TERMINATED
PURSUANT TO ANY RIGHT GRANTED OR RESERVED TO LANDLORD UNDER THIS SECTION, ALL
INSURANCE PROCEEDS PAYABLE WITH RESPECT TO THE DAMAGE GIVING RISE TO SUCH RIGHT
OF TERMINATION SHALL BE PAID TO LANDLORD, AND TENANT SHALL HAVE NO CLAIM
THEREFOR. NO DAMAGES, COMPENSATION OR CLAIM SHALL BE PAYABLE BY THE LANDLORD TO
TENANT, OR ANY OTHER PERSON, BY REASON OF INCONVENIENCE, LOSS OF BUSINESS OR
ANNOYANCE ARISING FROM ANY DAMAGE OR DESTRUCTION, OR ANY REPAIR THEREOF, AS IS
REFERRED TO IN THIS ARTICLE 10.
10.5 Scope of Landlord's Repairs. IN THE EVENT LANDLORD ELECTS OR SHALL BE
OBLIGATED TO REPAIR OR RESTORE ANY DAMAGE OR DESTRUCTION TO THE PREMISES
PURSUANT TO THIS ARTICLE 10, LANDLORD SHALL NOT BE OBLIGATED TO RESTORE OR
REPLACE TENANT'S PROPERTY, TENANT'S ALTERATIONS OR ANY EXISTING LEASEHOLD
IMPROVEMENTS.
ARTICLE 11 CONDEMNATION
11.1 Entire Condemnation. IN THE EVENT THAT THE WHOLE OF THE PREMISES SHALL BE TAKEN UNDER THE POWER OF EMINENT DOMAIN OR BY ANY PROCEEDING FOR TAKING FOR PUBLIC OR QUASI-PUBLIC USE (A "Condemnation"), THIS LEASE AND THE TERM AND ESTATE HEREBY GRANTED SHALL AUTOMATICALLY TERMINATE AS OF THE EARLIER OF THE DATE OF THE VESTING OF TITLE OR THE DATE OF DISPOSSESSION OF TENANT AS A RESULT OF SUCH TAKING.
11.2 Partial Condemnation.
11.2.1 EFFECT OF PARTIAL CONDEMNATION. IN THE EVENT THAT ONLY A PART OF THE PREMISES SHALL BE TAKEN BY CONDEMNATION AND TENANT SHALL HAVE REASONABLE, CONVENIENT ACCESS TO AND FROM THE PREMISES, THE TERM SHALL EXPIRE AS TO THAT PORTION OF THE PREMISES CONDEMNED EFFECTIVE AS OF THE DATE OF THE VESTING OF TITLE IN THE CONDEMNING AUTHORITY, AND THIS LEASE SHALL CONTINUE IN FULL FORCE AND EFFECT AS TO THE PART OF THE PREMISES NOT SO TAKEN.
11.2.2 LANDLORD'S OPTION TO TERMINATE. IN THE EVENT THAT A PART OF THE PROPERTY SHALL BE SUBJECT TO CONDEMNATION (WHETHER OR NOT THE PREMISES ARE
AFFECTED), LANDLORD MAY, AT ITS OPTION, TERMINATE THIS LEASE AS OF THE DATE OF SUCH VESTING OF TITLE, BY NOTIFYING TENANT IN WRITING OF SUCH TERMINATION WITHIN NINETY (90) DAYS FOLLOWING THE DATE ON WHICH LANDLORD SHALL HAVE RECEIVED NOTICE OF THE VESTING OF TITLE IN THE CONDEMNING AUTHORITY IF IN LANDLORD'S REASONABLE OPINION: (A) A SUBSTANTIAL ALTERATION OR RECONSTRUCTION OF THE PROPERTY (OR ANY PORTION THEREOF) SHALL BE NECESSARY OR APPROPRIATE, OR (B) THE PORTION OF THE PROPERTY SO CONDEMNED HAS THE EFFECT OF RENDERING THE REMAINDER OF THE PROPERTY UNECONOMIC TO MAINTAIN.
11.2.3 LANDLORD'S REPAIR OBLIGATIONS. IN THE EVENT THAT THIS LEASE IS NOT TERMINATED IN ACCORDANCE WITH SUBSECTION (B) HEREOF, LANDLORD SHALL, UPON RECEIPT OF THE AWARD IN CONDEMNATION, MAKE ALL NECESSARY REPAIRS OR ALTERATIONS TO THE BUILDING IN WHICH THE PREMISES ARE LOCATED SO AS TO CONSTITUTE THE REMAINING PREMISES A COMPLETE ARCHITECTURAL UNIT TO THE EXTENT FEASIBLE AND PERMITTED BY APPLICABLE LAW, BUT LANDLORD SHALL NOT BE REQUIRED TO SPEND FOR SUCH WORK AN AMOUNT IN EXCESS OF THE AMOUNT RECEIVED BY LANDLORD AS DAMAGES FOR THE PART OF THE PREMISES SO TAKEN. "AMOUNT RECEIVED BY LANDLORD" SHALL MEAN THAT PART OF THE AWARD IN CONDEMNATION WHICH IS FREE AND CLEAR TO LANDLORD OF ANY COLLECTION BY MORTGAGEES AND AFTER PAYMENT OF ALL COSTS INVOLVED IN COLLECTION, INCLUDING BUT NOT LIMITED TO ATTORNEY'S FEES. TENANT, AT IS OWN COST AND EXPENSE SHALL, RESTORE ALL EXTERIOR SIGNS, TRADE FIXTURES, EQUIPMENT, FURNITURE, FURNISHINGS AND OTHER INSTALLATIONS OF PERSONALTY OF TENANT WHICH ARE NOT TAKEN TO AS NEAR ITS FORMER CONDITION AS THE CIRCUMSTANCES WILL PERMIT. IN THE EVENT OF A PARTIAL TAKING, ALL PROVISIONS OF THIS LEASE SHALL REMAIN IN FULL FORCE AND EFFECT.
11.3 Temporary Taking. IF THERE IS A TAKING OF THE PREMISES FOR TEMPORARY USE ARISING OUT OF A TEMPORARY EMERGENCY OR OTHER TEMPORARY SITUATION, THIS LEASE SHALL CONTINUE IN FULL FORCE AND EFFECT, AND TENANT SHALL CONTINUE TO COMPLY WITH TENANT'S OBLIGATIONS UNDER THIS LEASE, EXCEPT TO THE EXTENT COMPLIANCE SHALL BE RENDERED IMPOSSIBLE OR IMPRACTICABLE BY REASON OF THE TAKING, AND TENANT SHALL BE ENTITLED TO THE AWARD FOR ITS INTEREST.
11.4 Condemnation Awards. EXCEPT AS PROVIDED IN THE PRECEDING SECTION 11.3, LANDLORD SHALL BE ENTITLED TO THE ENTIRE AWARD IN ANY CONDEMNATION PROCEEDING OR OTHER PROCEEDING FOR TAKING FOR PUBLIC OR QUASI-PUBLIC USE, INCLUDING, WITHOUT LIMITATION, ANY AWARD MADE FOR THE VALUE OF THE LEASEHOLD ESTATE CREATED BY THIS LEASE. NO AWARD FOR ANY PARTIAL OR ENTIRE TAKING SHALL BE APPORTIONED, AND TENANT HEREBY ASSIGNS TO LANDLORD ANY AWARD THAT MAY BE MADE IN SUCH CONDEMNATION OR OTHER TAKING, TOGETHER WITH ANY AND ALL RIGHTS OF TENANT NOW OR HEREAFTER ARISING IN OR TO SAME OR ANY PART THEREOF; PROVIDED, HOWEVER, THAT NOTHING CONTAINED HEREIN SHALL BE DEEMED TO GIVE LANDLORD ANY INTEREST IN OR TO REQUIRE TENANT TO ASSIGN TO LANDLORD ANY AWARD MADE TO TENANT SPECIFICALLY FOR ITS RELOCATION EXPENSES OR THE TAKING OF TENANT'S PROPERTY PROVIDED THAT SUCH AWARD DOES NOT DIMINISH OR REDUCE THE AMOUNT OF THE AWARD PAYABLE TO LANDLORD.
11.5 Proration. IN THE EVENT OF A PARTIAL CONDEMNATION OR OTHER TAKING THAT DOES NOT RESULT IN A TERMINATION OF THIS LEASE AS TO THE ENTIRE PREMISES, THEN THE ANNUAL BASE RENT AND TENANT'S PROPORTIONATE SHARE SHALL BE ADJUSTED IN PROPORTION TO THAT PORTION OF THE PREMISES TAKEN BY SUCH CONDEMNATION OR OTHER TAKING.
ARTICLE 12 ASSIGNMENT AND SUBLETTING
12.1 Assignment and Subletting.
12.1.1 Transfers; Transfer Notice. Tenant shall not, without the prior written consent of the Landlord, which consent shall not be unreasonably withheld, delayed or conditioned, assign, mortgage, encumber or otherwise transfer this Lease or any interest herein directly or indirectly, by operation of law or otherwise, or sublet the Premises or any part thereof, or permit the use or occupancy of the Premises by any party other than
Tenant (any such action, a "TRANSFER"). If at any time or from time to time during the Term, when no Event of Default has occurred and is continuing, Tenant desires to effect a Transfer, Tenant shall deliver to Landlord written notice ("TRANSFER NOTICE") setting forth the terms of the proposed Transfer and the identity of the proposed assignee, sublessee or other transferee (each a "TRANSFEREE"). Tenant shall also deliver to Landlord with the Transfer Notice reasonably acceptable to Landlord, an assumption agreement for Tenant's obligations under this Lease (in the case where the Transfer is a proposed assignment of this Lease) together with relevant information reasonably requested by Landlord concerning the proposed Transferee to assist Landlord in making an informed judgment regarding the financial responsibility, creditworthiness, reputation, and business experience of the Transferee. The provisions of this Section 12.1 shall apply to a Transfer (by one or more Transfers) of a controlling portion of or interest in the stock or partnership or membership interests or other evidences of equity interests of Tenant as if such Transfer were an assignment of this Lease; provided that, if equity interests in Tenant at any time are or become traded on a public stock exchange, the transfer of equity interests in Tenant on a public stock exchange shall not be deemed an assignment within the meaning of this Subsection 12.1.1.
12.1.2 Permitted Transfers to Affiliated Companies. Notwithstanding anything to the contrary in Section 12.1, Tenant shall have the right to assign this Lease or sublet the Premises to any "AFFILIATED COMPANY" (defined below) with Landlord's prior written notice and subject to Tenant's satisfaction of the following conditions: (a) Tenant shall deliver to Landlord a Transfer Notice (and related information) as required by Subsection 12.1.1 above; (b) no Event of Default has occurred and is continuing after the expiration of any notice and cure periods required by the terms of this Lease; (c) such Transferee shall use the Premises only for those uses expressly permitted by the terms of this Lease; (d) such transaction is not entered into as a subterfuge to avoid the restrictions and provisions of this Article 12; (e) the financial net worth and creditworthiness of the proposed Transferee shall be acceptable to Landlord (but not less than that of Tenant on the date hereof) based upon audited financial statements or equivalent financial information; (f) Tenant shall remain fully liable under this Lease and the Transferee shall be jointly and severally liable with Tenant for all such obligations; and (g) such entity shall agree directly with Landlord to be bound by all of the obligations of Tenant hereunder, including, without limitation, the obligation to pay all Rent and other charges due under this Lease.
12.1.3 Defined Terms. An "AFFILIATED COMPANY" shall mean: (a) any business entity that is controlled by, is under common control with, or that controls Tenant (an "AFFILIATE"); or (b) any corporation all of whose outstanding voting stock shall be owned directly or indirectly, by Tenant (a "WHOLLY-OWNED SUBSIDIARY"); and (c) a "SUCCESSOR CORPORATION" (as defined below). For purposes of determining whether an entity is an "Affiliated Company," the term "control" shall mean ownership of a majority of the outstanding voting stock of a corporation, or, in the case of an entity that is not a corporation, control shall mean ownership of a majority of the equity or other ownership or membership interests, and the possession of the power to direct the management and policy of such corporation or such other entity. A "SUCCESSOR CORPORATION" shall mean: (i) a corporation into which or with which Tenant, or its corporate successors or permitted assigns, is merged or consolidated, in accordance with applicable statutory provisions for the merger or consolidation of corporations, provided that by operation of law or by effective provisions contained in the instruments for merger, Tenant's liabilities are assumed by the corporation surviving such merger or consolidation or (ii) a corporation acquiring this Lease and the Lease Term hereby demised, the good-will and all or substantially all of the other property and assets of Tenant or its corporate successors or permitted assigns, and assuming all or substantially all of the liabilities of Tenant or its corporate successors or permitted assigns; or (iii) any corporate successor to a successor corporation becoming such by either of the methods described above in
clauses (i) and (ii). Notwithstanding any assignment, transfer or assumption of any obligations by a wholly-owned subsidiary, affiliate or successor corporation, under this Section 12, as the case may be, Tenant shall, to the extent it legally exists, remain liable for the performance of all the terms, conditions and covenants of this Lease.
12.2 Landlord's Options. EXCEPT IN THE CASE OF A PERMITTED TRANSFER FOR AN AFFILIATED COMPANY UNDER SUBSECTION 12.1.2, LANDLORD SHALL HAVE THE OPTION, EXERCISABLE BY WRITTEN NOTICE DELIVERED TO TENANT WITHIN THIRTY (30) DAYS AFTER LANDLORD'S RECEIPT OF A TRANSFER NOTICE ACCOMPANIED BY THE OTHER INFORMATION DESCRIBED IN SECTION 12.1, TO: (A) PERMIT TENANT TO TRANSFER THE PREMISES; OR (B) DISAPPROVE THE TENANT'S TRANSFER OF THE PREMISES AND TO CONTINUE THE LEASE IN FULL FORCE AND EFFECT AS TO THE ENTIRE PREMISES; OR (C) TERMINATE THE LEASE AS TO THE PORTION OF THE PREMISES AFFECTED BY THE TRANSFER AS OF THE DATE SET FORTH IN LANDLORD'S NOTICE OF EXERCISE OF SUCH OPTION, WHICH DATE SHALL NOT BE LESS THAN THIRTY (30) DAYS NOR MORE THAN ONE HUNDRED EIGHTY (180) DAYS FOLLOWING THE GIVING OF SUCH NOTICE. AS A CONDITION FOR GRANTING ITS CONSENT TO ANY TRANSFER, LANDLORD MAY REQUIRE THAT THE ANNUAL BASE RENT AND ADDITIONAL RENT PAYABLE BY SUCH TRANSFEREE IS AT THE THEN CURRENT PUBLISHED RENTAL RATES FOR THE PREMISES OR COMPARABLE PREMISES AT THE PROPERTY, AND MAY REQUIRE THAT THE TRANSFEREE REMIT DIRECTLY TO LANDLORD ON A MONTHLY BASIS, ALL MONIES DUE TO TENANT BY THE TRANSFEREE. IF LANDLORD EXERCISES ITS OPTION TO TERMINATE THIS LEASE (OR IN THE CASE OF A PARTIAL SUBLET TO RELEASE TENANT WITH RESPECT TO A PORTION OF THE PREMISES), TENANT SHALL SURRENDER POSSESSION OF SUCH PREMISES ON THE DATE SET FORTH IN LANDLORD'S NOTICE, AND THEREAFTER NEITHER LANDLORD NOR TENANT SHALL HAVE ANY FURTHER LIABILITY WITH RESPECT THERETO, EXCEPT THAT LANDLORD, AT LANDLORD'S SOLE COST, SHALL BE REQUIRED TO CONSTRUCT A DEMISING WALL (AND RELATED IMPROVEMENTS TO CONSTITUTE THE SURRENDERED SPACE AS A SEPARATE LEGAL PREMISES) AND ADEQUATE SEPARATION OF ALL BUILDING SYSTEMS FOR THE REMAINING TENANT SPACE IN ACCORDANCE WITH APPLICABLE LAWS. IF THIS LEASE SHALL BE TERMINATED AS TO A PORTION OF THE PREMISES ONLY, RENT AND TENANT'S PARKING ALLOCATION SHALL BE READJUSTED PROPORTIONATELY ACCORDING TO THE RATIO THAT THE NUMBER OF SQUARE FEET AND THE PORTION OF THE SPACE SURRENDERED COMPARES TO THE FLOOR AREA OF TENANT'S PREMISES DURING THE TERM OF THE PROPOSED SUBLET.
12.3 Additional Conditions.
12.3.1 CERTAIN TRANSFERS PROHIBITED. TENANT SHALL NOT OFFER TO MAKE, OR ENTER INTO NEGOTIATIONS WITH RESPECT TO ANY TRANSFER TO: (A) ANY TENANT OF THE PROPERTY OR ANY TENANT OF ANY ADJACENT PROPERTY OWNED BY LANDLORD OR ANY LANDLORD-AFFILIATED COMPANY (THE "Adjacent Property") OR ANY ENTITY OWNING OR OWNED BY, OR UNDER THE COMMON CONTROL OF, WHETHER DIRECTLY OR INDIRECTLY, A TENANT OF THE PROPERTY OR THE ADJACENT PROPERTY UNLESS THERE IS NO COMPETING SPACE THEN AVAILABLE FOR LEASES THEREIN; OR (B) ANY PARTY WITH WHOM LANDLORD (OR ITS AFFILIATE) IS THEN NEGOTIATING, AS EVIDENCED BY A SIGNED LETTER OF INTENT, WITH RESPECT TO OTHER SPACE IN THE BUILDING, AT THE PROPERTY OR AT THE ADJACENT PROPERTY; OR (C) ANY PARTY WHICH WOULD BE OF SUCH TYPE, CHARACTER, OR CONDITION AS TO BE INAPPROPRIATE AS A TENANT FOR THE BUILDING OR AT THE PROPERTY. IT SHALL NOT BE UNREASONABLE FOR LANDLORD TO DISAPPROVE ANY PROPOSED ASSIGNMENT, SUBLET OR TRANSFER TO ANY OF THE FOREGOING ENTITIES. TENANT AGREES NOT TO LIST OR ADVERTISE THE PREMISES FOR ASSIGNMENT OR SUBLEASE, WHETHER THROUGH A BROKER, AGENT OR REPRESENTATIVE, OR OTHERWISE AT A FULLY SERVICE RENTAL RATE WHICH IS LESS THAN LANDLORD'S CURRENT RATE FOR NEW TENANT AT THE PROPERTY, AS EVIDENCED BY A LEASE OR LETTER OF INTENT ENTERED INTO IN THE SIX MONTH PERIOD PRIOR TO TENANT'S OFFER OF SPACE (IF ANY ADDITION OR NEW BUILDING IS CONSTRUCTED BY LANDLORD). LANDLORD SHALL NOT BE DEEMED TO UNREASONABLY WITHHOLD ITS CONSENT TO ANY PROPOSED ASSIGNMENT OR SUBLEASE IS SUCH TRANSFER, IN LANDLORD'S REASONABLE DETERMINATION, IS AT A FULL-SERVICE RATE WHICH IS LESS THAN LANDLORD'S CURRENT RATE IN THE BUILDING FOR NEW TENANTS, AND WOULD COMPETE WITH
SIMILAR SPACE WITH SIMILAR BEING OFFERED OR ANTICIPATED TO BE OFFERED BY
LANDLORD AT THE PROPERTY.
12.3.2 CONDITIONS FOR APPROVED TRANSFERS. IF LANDLORD APPROVES OF THE PROPOSED TRANSFER PURSUANT TO SECTION 12.1 ABOVE, TENANT MAY ENTER INTO THE PROPOSED TRANSFER WITH SUCH PROPOSED TRANSFEREE SUBJECT TO THE FOLLOWING FURTHER CONDITIONS: (A) THE TRANSFER SHALL BE ON THE SAME TERMS SET FORTH IN THE TRANSFER NOTICE , AND (B) NO TRANSFER SHALL BE VALID AND NO TRANSFEREE SHALL TAKE POSSESSION OF THE PREMISES UNTIL AN EXECUTED COUNTERPART OF THE ASSIGNMENT, SUBLEASE OR OTHER INSTRUMENT EFFECTING THE TRANSFER (IN THE FORM REASONABLY APPROVED BY LANDLORD) HAS BEEN DELIVERED TO LANDLORD PURSUANT TO WHICH THE TRANSFEREE SHALL EXPRESSLY ASSUME ALL OF TENANT'S OBLIGATIONS UNDER THIS LEASE; AND (C) TENANT SHALL PROVIDE LANDLORD WITH A WRITTEN RATIFICATION AGREEMENT FROM EACH GUARANTOR OF THIS LEASE IN FORM AND SUBSTANCE SATISFACTORY TO LANDLORD.
12.4 No Release.
12.4.1 TENANT'S CONTINUING LIABILITY. EXCEPT AS OTHERWISE PROVIDED HEREIN, NO TRANSFER SHALL BE EFFECTIVE UNLESS APPROVED IN WRITING BY LANDLORD. LANDLORD'S CONSENT TO A TRANSFER SHALL NOT RELEASE TENANT OF TENANT'S OBLIGATIONS UNDER THIS LEASE AND THIS LEASE AND ALL OF THE OBLIGATIONS OF TENANT UNDER THIS LEASE SHALL CONTINUE IN FULL FORCE AND EFFECT AS THE OBLIGATIONS OF A PRINCIPAL (AND NOT AS THE OBLIGATIONS OF A GUARANTOR OR SURETY). FROM AND AFTER ANY TRANSFER, THE LEASE OBLIGATIONS OF THE TRANSFEREE AND OF THE ORIGINAL TENANT NAMED IN THIS LEASE SHALL BE JOINT AND SEVERAL. NO ACCEPTANCE OF RENT BY LANDLORD FROM OR RECOGNITION IN ANY WAY OF THE OCCUPANCY OF THE PREMISES BY A TRANSFEREE SHALL BE DEEMED A CONSENT TO SUCH TRANSFER, OR A RELEASE OF TENANT FROM DIRECT AND PRIMARY LIABILITY FOR THE FURTHER PERFORMANCE OF TENANT'S COVENANTS HEREUNDER. THE CONSENT BY LANDLORD TO A PARTICULAR TRANSFER SHALL NOT RELIEVE TENANT FROM THE REQUIREMENT OF OBTAINING THE CONSENT OF LANDLORD TO ANY FURTHER TRANSFER. EACH VIOLATION OF ANY OF THE COVENANTS, AGREEMENTS, TERMS OR CONDITIONS OF THIS LEASE, WHETHER BY ACT OR OMISSION, BY ANY OF TENANT'S PERMITTED TRANSFEREES, SHALL CONSTITUTE A VIOLATION THEREOF BY TENANT. IN THE EVENT OF DEFAULT BY ANY TRANSFEREE OF TENANT OR ANY SUCCESSOR OF TENANT IN THE PERFORMANCE OF ANY OF THE TERMS HEREOF, LANDLORD MAY PROCEED DIRECTLY AGAINST TENANT WITHOUT THE NECESSITY OF EXHAUSTING REMEDIES AGAINST SUCH TRANSFEREE OR SUCCESSOR.
12.4.2 LANDLORD'S RIGHTS TO COLLECT RENT FROM ASSIGNEE AND SUBTENANT. IF THIS LEASE SHALL BE ASSIGNED, OR IF THE PREMISES OR ANY PART THEREOF SHALL BE SUBLET, LICENSED OR OCCUPIED BY ANY PERSON OR PERSONS OTHER THAN TENANT, LANDLORD MAY, AFTER DEFAULT BY TENANT (AFTER ANY APPLICABLE NOTICE AND CURE PERIODS REQUIRED BY THE TERMS OF THIS LEASE), COLLECT RENT FROM THE ASSIGNEE, SUBTENANT, LICENSEE OR OCCUPANT AND APPLY THE NET AMOUNT COLLECTED TO THE RENTS HEREIN RESERVED, BUT NO SUCH ASSIGNMENT, SUBLETTING, OCCUPANCY OR COLLECTION OR RENT SHALL BE DEEMED A WAIVER OF THE COVENANTS IN THIS ARTICLE 12, NOR SHALL IT BE DEEMED ACCEPTANCE OF THE ASSIGNEE, SUBTENANT, LICENSEE OR OCCUPANCY AS A TENANT, OR A RELEASE OF TENANT FROM THE FULL PERFORMANCE BY TENANT OF ALL THE TERMS, CONDITIONS AND COVENANTS OF THIS LEASE, AND TENANT SHALL REMAIN LIABLE THEREFOR.
12.5 Transfer Profit. EXCEPT FOR TRANSFERS TO AFFILIATED COMPANIES, TENANT
SHALL PAY TO LANDLORD, AS ADDITIONAL RENT, AN AMOUNT (THE "Transfer Profit")
EQUAL TO FIFTY PERCENT (50%) OF ALL RENT AND OTHER ECONOMIC CONSIDERATION
RECEIVED BY TENANT AS A RESULT OF ANY TRANSFER WHICH EXCEEDS, IN THE AGGREGATE:
(A) THE TOTAL OF THE REMAINING RENT WHICH TENANT IS OBLIGATED TO PAY LANDLORD
UNDER THIS LEASE (PRORATED TO REFLECT OBLIGATIONS ALLOCABLE TO ANY PORTION OF
THE PREMISES SUBLEASED) PLUS (B) ANY REASONABLE TENANT FIT-UP COSTS,
BROKERAGE COMMISSIONS AND ATTORNEYS' FEES ACTUALLY PAID BY TENANT IN CONNECTION WITH SUCH TRANSFER AMORTIZED ON A STRAIGHT-LINE BASIS OVER THE TERM OF THE TRANSFER (SPECIFICALLY EXCLUDING MOVING OR RELOCATION COSTS PAID TO THE TRANSFEREE). TENANT SHALL PAY SUCH TRANSFER PROFIT TO LANDLORD ON A MONTHLY BASIS WITHIN TEN (10) DAYS AFTER RECEIPT THEREOF, WITHOUT AFFECTING OR REDUCING ANY OTHER OBLIGATIONS OF TENANT HEREUNDER. EACH SUCH PAYMENT SHALL BE SENT WITH A DETAILED STATEMENT. LANDLORD SHALL HAVE THE RIGHT TO AUDIT TENANT'S BOOKS AND RECORDS TO VERIFY THE ACCURACY OF THE DETAILED STATEMENT.
ARTICLE 13 DEFAULTS AND REMEDIES
13.1 Events of Default. THE OCCURRENCE OF ANY ONE OR MORE OF THE FOLLOWING EVENTS SHALL CONSTITUTE AN EVENT OF DEFAULT (EACH AN "Event of Default") HEREUNDER:
13.1.1 NON-PAYMENT OF ANNUAL BASE RENT OR ADDITIONAL RENT. FAILURE BY TENANT TO PAY ANY INSTALLMENT OF ANNUAL BASE RENT, ADDITIONAL RENT OR ANY OTHER AMOUNT, DEPOSIT, REIMBURSEMENT OR SUM DUE AND PAYABLE HEREUNDER, UPON THE DATE WHEN SAID PAYMENT IS DUE; PROVIDED, HOWEVER, ON THE FIRST (1ST) OCCASION ONLY DURING ANY LEASE YEAR WITH RESPECT TO ANNUAL BASE RENT, LANDLORD SHALL FURNISH TENANT WITH WRITTEN NOTICE OF SUCH FAILURE AND PERMIT TENANT A FIVE (5)-DAY PERIOD TO CURE SUCH FAILURE.
13.1.2 CERTAIN OBLIGATIONS. FAILURE BY TENANT TO PERFORM, OBSERVE OR
COMPLY WITH ANY NON-MONETARY OBLIGATION CONTAINED IN SECTION 4.6 ("Security
Deposit"), SECTION 7.4 ("No Liens") AND ARTICLE 12 ("Assignment and
Subletting") OF THIS LEASE.
13.1.3 OTHER OBLIGATIONS. FAILURE BY TENANT TO PERFORM ANY NON-MONETARY OBLIGATION, AGREEMENT OR COVENANT UNDER THIS LEASE OTHER THAN THOSE MATTERS SPECIFIED IN SUBSECTION 13.1.1 OR SUBSECTION 13.1.2, AND SUCH FAILURE CONTINUES FOR THIRTY (30) DAYS AFTER WRITTEN NOTICE BY LANDLORD TO TENANT OF SUCH FAILURE; PROVIDED, HOWEVER, THAT IF THE NATURE OF TENANT'S OBLIGATION IS SUCH THAT MORE THAN THIRTY (30) DAYS ARE REQUIRED FOR PERFORMANCE, THEN TENANT SHALL NOT BE IN DEFAULT IF TENANT COMMENCES PERFORMANCE WITHIN SUCH THIRTY (30)-DAY PERIOD AND THEREAFTER DILIGENTLY AND CONTINUOUSLY PROSECUTES THE SAME TO COMPLETION WITHIN SIXTY (60) DAYS FOLLOWING THE DATE OF LANDLORD'S WRITTEN NOTICE WITH RESPECT TO SUCH FAILURE.
13.1.4 ASSIGNMENT; RECEIVERSHIP; ATTACHMENT. (A) THE MAKING BY TENANT
OF ANY ARRANGEMENT OR ASSIGNMENT FOR THE BENEFIT OF CREDITORS, EXCEPT IN
THE ORDINARY COURSE OF BUSINESS RELATED TO OBTAINING FINANCING; (B) THE
APPOINTMENT OF A TRUSTEE OR RECEIVER TO TAKE POSSESSION OF SUBSTANTIALLY
ALL OF TENANT'S ASSETS LOCATED AT THE PREMISES OR OF TENANT'S INTEREST IN
THIS LEASE, WHERE POSSESSION IS NOT RESTORED TO TENANT WITHIN THIRTY (30)
DAYS; OR (C) THE ATTACHMENT, EXECUTION, OR OTHER JUDICIAL SEIZURE OF
SUBSTANTIALLY ALL OF TENANT'S ASSETS LOCATED AT THE PREMISES OR OF TENANT'S
INTEREST IN THIS LEASE, WHERE SUCH SEIZURE IS NOT DISCHARGED WITHIN THIRTY
(30) DAYS.
13.1.5 BANKRUPTCY. THE ADMISSION BY TENANT OR TENANT'S GUARANTOR (IF ANY) IN WRITING OF ITS INABILITY TO PAY ITS DEBTS AS THEY BECOME DUE, THE FILING BY TENANT OR TENANT'S GUARANTOR (IF ANY) OF A PETITION IN BANKRUPTCY SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE STATUTE, LAW OR REGULATION, THE FILING BY TENANT OR TENANT'S GUARANTOR (IF ANY) OF AN ANSWER ADMITTING OR FAILING TIMELY TO CONTEST A MATERIAL ALLEGATION OF A PETITION FILED AGAINST TENANT OR TENANT'S GUARANTOR (IF ANY) IN ANY SUCH PROCEEDING OR, IF WITHIN FORTY-FIVE (45) DAYS AFTER THE COMMENCEMENT OF ANY PROCEEDING AGAINST TENANT OR TENANT'S GUARANTOR (IF ANY) SEEKING ANY INVOLUNTARY REORGANIZATION, OR ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION OR SIMILAR RELIEF UNDER ANY PRESENT OR FUTURE
STATUTE, LAW OR REGULATION BY ANY OF TENANT'S CREDITORS OR SUCH GUARANTOR'S
CREDITORS, SUCH PROCEEDING SHALL NOT HAVE BEEN DISMISSED.
13.1.6 ABANDONMENT. ABANDONMENT OF THE PREMISES BY TENANT FOR A CONTINUOUS PERIOD IN EXCESS OF SIXTY (60) BUSINESS DAYS, EXCEPT ANY PERIOD THAT TENANT IS NOT IN OCCUPANCY DUE TO A CASUALTY OR CONDEMNATION.
13.2 Remedies. IF AN EVENT OF DEFAULT OCCURS, LANDLORD SHALL HAVE THE FOLLOWING RIGHTS AND REMEDIES, IN ADDITION TO ANY AND ALL OTHER RIGHTS OR REMEDIES AVAILABLE TO LANDLORD IN LAW OR EQUITY:
13.2.1 NOTICE TO QUIT. LANDLORD SHALL HAVE THE RIGHT TO DELIVER WRITTEN NOTICE TO TENANT TO QUIT POSSESSION AND OCCUPANCY OF THE PREMISES AND TO DECLARE THE LEASE TERMINATED. UPON LANDLORD'S TERMINATION OF THIS LEASE, TENANT SHALL QUIT AND PEACEABLY SURRENDER THE PREMISES, AND ALL PORTIONS THEREOF, TO LANDLORD, AND LANDLORD SHALL HAVE THE RIGHT TO RECEIVE ALL RENTAL AND OTHER INCOME OF AND FROM THE SAME.
13.2.2 RIGHT OF RE-ENTRY. LANDLORD SHALL HAVE THE RIGHT, WITH OR WITHOUT TERMINATING THIS LEASE, TO RE-ENTER THE PREMISES AND TAKE POSSESSION THEREOF BY SUMMARY PROCEEDING, EVICTION, EJECTMENT OR OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS AS AND MAY DISPOSSESS ALL OTHER PERSONS AND PROPERTY FROM THE PREMISES. TENANT'S PROPERTY MAY BE REMOVED AND STORED IN A PUBLIC WAREHOUSE OR ELSEWHERE AT THE COST OF AND FOR THE ACCOUNT OF TENANT. NO RE-ENTRY OR TAKING POSSESSION OF THE PREMISES BY LANDLORD PURSUANT TO THIS SUBSECTION 13.2.2 SHALL BE CONSTRUED AS AN ELECTION TO TERMINATE THIS LEASE UNLESS A WRITTEN NOTICE OF SUCH INTENTION IS GIVEN TO TENANT OR UNLESS THE TERMINATION THEREOF IS DECREED BY A COURT OF COMPETENT JURISDICTION. TENANT THEREBY WAIVES NOTICE BEFORE EXERCISE OF ANY PREJUDGMENT REMEDY, AND ANY RIGHTS OF REDEMPTION, ALL TO THE EXTENT SUCH RIGHTS MAY BE LAWFULLY WAIVED.
13.2.3 RECOVERY OF RENT AND DAMAGES. LANDLORD SHALL HAVE THE RIGHT TO
RECOVER FROM TENANT ALL LOSS OF RENT AND OTHER DAMAGES THAT LANDLORD MAY
INCUR BY REASON OF TERMINATION OF THE LEASE, INCLUDING, WITHOUT LIMITATION:
(A) ALL RENT AND OTHER SUMS DUE AND PAYABLE BY TENANT AS OF THE DATE OF
TERMINATION; (B) ALL RENT THAT WOULD OTHERWISE BE PAYABLE FOR THE REMAINDER
OF THE TERM IN ACCORDANCE WITH THE TERMS OF THIS LEASE; (C) ALL OF
LANDLORD'S THEN UNAMORTIZED COSTS OF SPECIAL INDUCEMENTS PROVIDED TO TENANT
(INCLUDING WITHOUT LIMITATION RENT CONCESSIONS, TENANT CONSTRUCTION
ALLOWANCES, RENT WAIVERS, ABOVE BUILDING STANDARD LEASEHOLD IMPROVEMENTS,
AND THE LIKE); (D) THE COSTS OF COLLECTING AMOUNTS DUE FROM TENANT UNDER
THE LEASE AND THE COSTS OF RECOVERING POSSESSION OF THE PREMISES (INCLUDING
ATTORNEYS FEES AND LITIGATION COSTS) SUBJECT TO SECTION 16.13 HEREOF; (E)
THE COSTS OF CURING TENANT'S DEFAULTS EXISTING AT OR PRIOR TO THE DATE OF
TERMINATION; (F) ALL "Reletting Expenses" (AS DEFINED BELOW); AND (G) ALL
LANDLORD'S DAMAGES ARISING FROM THE TERMINATION. FOLLOWING LANDLORD'S
TERMINATION OF THIS LEASE DUE TO AN EVENT OF DEFAULT, LANDLORD SHALL USE
REASONABLE EFFORTS TO MITIGATE ITS DAMAGES.
13.2.4 ACCELERATION OF FUTURE RENTALS. FOLLOWING TERMINATION OF THIS LEASE, LANDLORD, AT ITS ELECTION, MAY DEMAND TO BE INDEMNIFIED FOR ITS LOSS OF RENT (WITH RESPECT TO THE PERIOD FOLLOWING SUCH TERMINATION) BY A LUMP SUM PAYMENT REPRESENTING THE THEN PRESENT VALUE OF THE AMOUNT OF RENT THAT WOULD HAVE BEEN PAID IN ACCORDANCE WITH THIS LEASE FOR THE REMAINDER OF THE TERM MINUS THE THEN PRESENT VALUE OF THE AGGREGATE FAIR MARKET RENT AND ADDITIONAL CHARGES PAYABLE FOR THE PREMISES FOR THE REMAINDER OF THE TERM (IF LESS THAN THE RENT PAYABLE HEREUNDER) ESTIMATED AS OF THE DATE OF TERMINATION, AND TAKING INTO ACCOUNT LANDLORD'S REASONABLE PROJECTIONS OF VACANCY AND TIME REQUIRED TO RE-LEASE THE
PREMISES. LANDLORD SHALL BE ENTITLED TO RECOVER FROM TENANT, AND TENANT SHALL PAY TO LANDLORD, ON DEMAND, SUCH AMOUNT AS FINAL DAMAGES FOR TENANT'S DEFAULT WITH RESPECT TO THE RENTS PAYABLE FOR THE REMAINDER OF THE TERM AS DESCRIBED ABOVE. IN THE COMPUTATION OF PRESENT VALUE, THE FEDERAL RESERVE DISCOUNT RATE (OR EQUIVALENT) SHALL BE EMPLOYED.
13.2.5 RENTS DUE AFTER RE-ENTRY BY LANDLORD. IF LANDLORD RE-ENTERS OR
OTHERWISE TAKES POSSESSION OF THE PREMISES WITHOUT TERMINATING THIS LEASE
(BUT TERMINATING ONLY TENANT'S RIGHT OF POSSESSION IN THE PREMISES), THEN
THE LEASE AND TENANT'S LIABILITIES AND OBLIGATIONS THEREUNDER SHALL SURVIVE
SUCH ACTION. IN THE EVENT OF ANY SUCH TERMINATION OF TENANT'S RIGHT OF
POSSESSION, WHETHER OR NOT THE PREMISES, OR ANY PORTION THEREOF, SHALL HAVE
BEEN RELET, TENANT SHALL PAY THE LANDLORD A SUM EQUAL TO THE RENT AND ANY
OTHER CHARGES REQUIRED TO BE PAID BY TENANT UP TO THE TIME OF SUCH
TERMINATION OF SUCH RIGHT OF POSSESSION AND THEREAFTER TENANT, UNTIL THE
END OF THE TERM, SHALL BE LIABLE TO LANDLORD FOR AND SHALL PAY TO LANDLORD:
(A) THE EQUIVALENT OF THE AMOUNT OF THE RENT PAYABLE UNDER THIS LEASE, LESS
(B) THE NET PROCEEDS OF ANY RELETTING EFFECTED PURSUANT TO THE PROVISIONS
HEREOF AFTER DEDUCTING ALL OF LANDLORD'S RELETTING EXPENSES. TENANT SHALL
PAY SUCH AMOUNTS IN ACCORDANCE WITH THE TERMS OF THIS SUBSECTION 13.2.5 AS
SET FORTH IN A WRITTEN STATEMENT THEREOF FROM LANDLORD TO TENANT (THE
"Deficiency") TO LANDLORD IN MONTHLY INSTALLMENTS ON THE DAYS ON WHICH THE
ANNUAL BASE RENT IS PAYABLE UNDER THIS LEASE, AND LANDLORD SHALL BE
ENTITLED TO RECOVER FROM TENANT EACH MONTHLY INSTALLMENT OF THE DEFICIENCY
AS THE SAME SHALL ARISE. TENANT SHALL ALSO PAY TO LANDLORD UPON DEMAND THE
COSTS INCURRED BY LANDLORD IN CURING TENANT'S DEFAULTS EXISTING AT OR PRIOR
TO THE DATE OF SUCH TERMINATION, THE COST OF RECOVERING POSSESSION OF THE
PREMISES AND THE RELETTING EXPENSES. TENANT AGREES THAT LANDLORD MAY FILE
SUIT TO RECOVER ANY SUMS THAT BECOME DUE UNDER THE TERMS OF THIS SECTION
FROM TIME TO TIME, AND ALL REASONABLE COSTS AND EXPENSES OF LANDLORD,
INCLUDING ATTORNEYS' FEES AND COSTS INCURRED IN CONNECTION WITH SUCH SUITS
SHALL BE PAYABLE BY TENANT ON DEMAND, SUBJECT TO THE PROVISIONS OF SECTION
16.13 HEREOF.
13.2.6 CERTAIN TERMS DEFINED. FOR PURPOSES OF THIS SECTION 13.2,
"Reletting Alterations" SHALL MEAN ALL REPAIRS, CHANGES, IMPROVEMENTS,
ALTERATIONS OR ADDITIONS MADE BY LANDLORD IN OR TO THE PREMISES TO THE
EXTENT DEEMED REASONABLY NECESSARY BY LANDLORD TO PREPARE THE PREMISES FOR
THE RE-LEASING FOLLOWING AN EVENT OF DEFAULT; AND "Reletting Expenses"
SHALL MEAN THE REASONABLE EXPENSES PAID OR INCURRED BY LANDLORD IN
CONNECTION WITH ANY RE-LEASING OF THE PREMISES FOLLOWING AN EVENT OF
DEFAULT, INCLUDING, WITHOUT LIMITATION, MARKETING EXPENSES, BROKERAGE
COMMISSIONS, MANAGEMENT FEES, ATTORNEYS' FEES, THE COSTS OF RELETTING
ALTERATIONS, OPERATING EXPENSES AND RENT, TENANT ALLOWANCES AND OTHER
ECONOMIC CONCESSIONS PROVIDED TO THE NEW TENANT.
13.3 Landlord's Right to Cure Defaults. IF THE TENANT SHALL DEFAULT IN THE
OBSERVANCE OR PERFORMANCE OF ANY CONDITION OR COVENANT ON TENANT'S PART TO BE
OBSERVED OR PERFORMED UNDER OR BY VIRTUE OF ANY OF THE PROVISIONS OF THIS LEASE,
AND SUCH DEFAULT CONTINUES BEYOND ANY APPLICABLE NOTICE AND CURE PERIOD OR
LANDLORD REASONABLY DETERMINES THAT AN EMERGENCY EXISTS, THE LANDLORD, WITHOUT
BEING UNDER ANY OBLIGATION TO DO SO AND WITHOUT THEREBY WAIVING SUCH DEFAULT,
MAY REMEDY SUCH DEFAULT FOR THE ACCOUNT AND AT THE EXPENSE OF THE TENANT. IF THE
LANDLORD MAKES ANY EXPENDITURES OR INCURS ANY OBLIGATIONS FOR THE PAYMENT OF
MONEY IN CONNECTION THEREWITH, SUCH SUMS PAID OR OBLIGATION INCURRED AND COSTS,
SHALL BE PAID UPON DEMAND TO THE LANDLORD BY THE TENANT AS ADDITIONAL RENT
PURSUANT TO SECTION 4.4 HEREOF AND IF NOT SO PAID WITH INTEREST FROM ITS DUE
DATE UNTIL PAID AT THE LESSER OF EIGHTEEN PERCENT (18%) PER ANNUM OR THE MAXIMUM
LEGAL RATE THAT LANDLORD MAY CHARGE TENANT.
13.4 Disposition of Tenant's Property. IN ADDITION TO LANDLORD'S RIGHTS
UNDER SECTION 8.4 HEREOF, LANDLORD SHALL HAVE THE RIGHT TO HANDLE, REMOVE,
DISCARD OR STORE IN A COMMERCIAL WAREHOUSE OR OTHERWISE, AT TENANT'S SOLE RISK
AND EXPENSE, ANY OF TENANT'S PROPERTY THAT IS NOT REMOVED BY TENANT AT THE END
OF THE TERM. LANDLORD SHALL IN NO EVENT BE RESPONSIBLE FOR THE VALUE,
PRESERVATION OR SAFEKEEPING THEREOF. TENANT SHALL PAY TO LANDLORD, UPON DEMAND,
ANY AND ALL EXPENSES INCURRED IN SUCH REMOVAL AND ALL STORAGE CHARGES FOR SUCH
PROPERTY SO LONG AS THE SAME SHALL BE IN LANDLORD'S POSSESSION OR UNDER
LANDLORD'S CONTROL.
13.5 Reletting. IN CONNECTION WITH ANY RELETTING OF THE PREMISES FOLLOWING AN EVENT OF DEFAULT, LANDLORD SHALL BE ENTITLED TO GRANT SUCH RENTAL AND ECONOMIC CONCESSIONS AND OTHER INCENTIVES AS MAY BE CUSTOMARY FOR SIMILAR SPACE IN THE NEW HAVEN COUNTY SHORELINE AREA. LANDLORD SHALL NOT BE REQUIRED TO ACCEPT ANY TENANT OFFERED BY TENANT OR OBSERVE ANY INSTRUCTION GIVEN BY TENANT ABOUT SUCH RELETTING.
13.6 No Accord and Satisfaction. LANDLORD MAY COLLECT AND RECEIVE ANY RENT
DUE FROM TENANT, AND THE PAYMENT THEREOF SHALL NOT CONSTITUTE A WAIVER OF OR
AFFECT ANY NOTICE OR DEMAND GIVEN, SUIT INSTITUTED OR JUDGMENT OBTAINED BY
LANDLORD, OR BE HELD TO WAIVE, AFFECT, CHANGE, MODIFY OR ALTER THE RIGHTS OR
REMEDIES THAT LANDLORD HAS AGAINST TENANT IN EQUITY, AT LAW, OR BY VIRTUE OF
THIS LEASE. NO RECEIPT OR ACCEPTANCE BY LANDLORD FROM TENANT OF LESS THAN THE
MONTHLY RENT HEREIN STIPULATED SHALL BE DEEMED TO BE OTHER THAN A PARTIAL
PAYMENT ON ACCOUNT FOR ANY DUE AND UNPAID STIPULATED RENT; NO ENDORSEMENT OR
STATEMENT ON ANY CHECK OR ANY LETTER OR OTHER WRITING ACCOMPANYING ANY CHECK OR
PAYMENT OF RENT TO LANDLORD SHALL BE DEEMED AN ACCORD AND SATISFACTION, AND
LANDLORD MAY ACCEPT AND NEGOTIATE SUCH CHECK OR PAYMENT WITHOUT PREJUDICE TO
LANDLORD'S RIGHTS TO (A) RECOVER THE REMAINING BALANCE OF SUCH UNPAID RENT, OR
(B) PURSUE ANY OTHER REMEDY PROVIDED IN THIS LEASE.
13.7 Claims in Bankruptcy. NOTHING HEREIN SHALL LIMIT OR PREJUDICE THE RIGHT OF LANDLORD TO PROVE AND OBTAIN IN PROCEEDING FOR BANKRUPTCY, INSOLVENCY, ARRANGEMENT OR REORGANIZATION BY REASON OF THE TERMINATION OF THIS LEASE, AN AMOUNT EQUAL TO THE MAXIMUM ALLOWED BY ANY STATUTE OR RULE OF LAW IN EFFECT AT THE TIME WHEN, AND GOVERNING THE PROCEEDINGS IN WHICH, THE DAMAGES ARE TO BE PROVED, WHETHER OR NOT THE AMOUNT IS GREATER, EQUAL TO OR LESS THAN THE AMOUNT OF THE LOSS OR DAMAGE THAT LANDLORD HAS SUFFERED. WITHOUT LIMITING ANY OF THE PROVISIONS OF THIS ARTICLE 13, IF PURSUANT TO THE BANKRUPTCY CODE, AS THE SAME MAY BE AMENDED, TENANT IS PERMITTED TO ASSIGN THIS LEASE IN DISREGARD OF THE RESTRICTIONS CONTAINED IN ARTICLE 12, TENANT AGREES THAT ADEQUATE ASSURANCE OF FUTURE PERFORMANCE BY THE ASSIGNEE PERMITTED UNDER THE BANKRUPTCY CODE SHALL MEAN THE DEPOSIT OF CASH SECURITY WITH LANDLORD IN ANY AMOUNT EQUAL TO ALL RENT PAYABLE UNDER THIS LEASE FOR THE CALENDAR YEAR PRECEDING THE YEAR IN WHICH SUCH ASSIGNMENT IS INTENDED TO BECOME EFFECTIVE, WHICH DEPOSIT SHALL BE HELD BY LANDLORD, WITHOUT INTEREST, FOR THE BALANCE OF THE TERM AS SECURITY FOR THE FULL AND FAITHFUL PERFORMANCE OF ALL OF THE OBLIGATIONS UNDER THIS LEASE ON THE PART OF TENANT YET TO BE PERFORMED. IF TENANT RECEIVES OR IS TO RECEIVE ANY VALUABLE CONSIDERATION FOR SUCH AN ASSIGNMENT OF THIS LEASE, SUCH CONSIDERATION, AFTER DEDUCTING THEREFROM (A) THE BROKERAGE COMMISSIONS, IF ANY, AND OTHER EXPENSES REASONABLY DESIGNATED BY THE ASSIGNEE AS PAID FOR THE PURCHASE OF TENANT'S PROPERTY IN THE PREMISES, SHALL BE AND BECOME THE SOLE EXCLUSIVE PROPERTY OF LANDLORD AND SHALL BE PAID OVER TO LANDLORD DIRECTLY BY SUCH ASSIGNEE. IN ADDITION, ADEQUATE ASSURANCE SHALL MEAN THAT ANY SUCH ASSIGNEE OF THIS LEASE SHALL HAVE A NET WORTH INDICATING SAID ASSIGNEE'S REASONABLE ABILITY TO PAY THE RENT, AND ABIDE BY THE TERMS OF THIS LEASE FOR THE REMAINING PORTION THEREOF APPLYING COMMERCIALLY REASONABLE STANDARDS.
13.8 No Waiver of Rights. NO FAILURE BY LANDLORD TO INSIST UPON STRICT PERFORMANCE OF ANY COVENANTS, AGREEMENT, TERM OR CONDITION OF THIS LEASE, OR TO EXERCISE ANY RIGHT OR REMEDY CONSEQUENT UPON BREACH THEREOF, AND NO ACCEPTANCE OF FULL OR PARTIAL RENT DURING THE CONTINUANCE OF ANY BREACH, SHALL CONSTITUTE A WAIVER OF ANY SUCH OR OF ANY
COVENANT, AGREEMENT, TERM OR CONDITION. WHENEVER, UNDER ANY PROVISION OF THIS LEASE, TENANT SHALL BE ENTITLED TO RECEIVE ANY PAYMENT FROM LANDLORD OR TO EXERCISE ANY PRIVILEGE OR RIGHT UNDER THIS LEASE, LANDLORD SHALL NOT BE OBLIGATED TO MAKE ANY SUCH PAYMENT AND TENANT SHALL NOT BE ENTITLED TO EXERCISE ANY SUCH PRIVILEGE OR RIGHT SO LONG AS TENANT SHALL BE IN DEFAULT UNDER ANY OF THE PROVISIONS OF THIS LEASE BEYOND ANY APPLICABLE GRACE PERIOD SET FORTH IN THIS LEASE. TENANT SHALL NOT BE ENTITLED TO OFFSET AGAINST RENT OR ANY OTHER CHARGES PAYABLE UNDER THIS LEASE ANY PAYMENTS DUE FROM LANDLORD TO TENANT OR ANY MORTGAGEE. EACH RIGHT AND REMEDY OF LANDLORD PROVIDED FOR IN THIS LEASE SHALL BE CUMULATIVE AND CONCURRENT AND SHALL BE IN ADDITION TO EVERY OTHER RIGHT OR REMEDY PROVIDED FOR IN THIS LEASE NOW OR HEREAFTER EXISTING AT LAW OR IN EQUITY OR BY STATUTE OR OTHERWISE. LANDLORD'S EXERCISE OF ANY ONE OR MORE OF SUCH RIGHTS OR REMEDIES SHALL NOT PRECLUDE THE SIMULTANEOUS EXERCISE BY LANDLORD OF ANY OR ALL OTHER RIGHTS OR REMEDIES PROVIDED FOR IN THIS LEASE OR NOW OR HEREAFTER EXISTING AT LAW OR IN EQUITY OR BY STATUTE OR OTHERWISE.
13.9 Arbitration. ANY DISPUTE ARISING OUT OF OR RELATING TO ARTICLE 5,
SECTION 6.1, SECTION 8.1 OR ARTICLE 19, OF THIS LEASE (WITH RESPECT TO THE
ISSUES EXPRESSLY STATED THEREIN) SHALL BE SUBMITTED TO AND DETERMINED IN BINDING
ARBITRATION UNDER THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. THE ARBITRATION SHALL BE CONDUCTED BEFORE AND BY A SINGLE
ARBITRATOR SELECTED BY THE PARTIES. IF THE PARTIES HAVE NOT SELECTED AN
ARBITRATOR WITHIN THIRTY (30) DAYS OF WRITTEN DEMAND FOR ARBITRATION, THE
ARBITRATOR SHALL BE SELECTED BY THE AMERICAN ARBITRATION ASSOCIATION PURSUANT TO
THE THEN CURRENT RULES OF THAT ASSOCIATION ON APPLICATION BY EITHER PARTY. THE
ARBITRATOR SHALL HAVE AUTHORITY TO FASHION SUCH JUST, EQUITABLE AND LEGAL RELIEF
AS HE, IN HIS SOLE DISCRETION, MAY DETERMINE. THE PARTIES AGREE THAT THE
ARBITRATION HEARING SHALL BE HELD WITHIN THIRTY (30) BUSINESS DAYS FOLLOWING
NOTIFICATION TO THE PARTIES OF THE APPOINTMENT OF SUCH ARBITRATOR, AND THAT THE
ARBITRATION PROCEEDINGS SHALL BE CONCLUDED WITHIN THIRTY (30) BUSINESS DAYS
FOLLOWING THE FIRST SCHEDULED ARBITRATION HEARING. EACH PARTY SHALL BEAR ALL ITS
OWN EXPENSES OF ARBITRATION AND SHALL BEAR EQUALLY THE COSTS AND EXPENSES OF THE
ARBITRATOR. ALL ARBITRATION PROCEEDINGS SHALL BE CONDUCTED IN THE CITY OF NEW
HAVEN, STATE OF CONNECTICUT. LANDLORD AND TENANT FURTHER AGREE THAT THEY WILL
FAITHFULLY OBSERVE THIS AGREEMENT AND RULES, AND THAT THEY WILL ABIDE BY AND
PERFORM ANY AWARD RENDERED BY THE ARBITRATOR AND THAT A JUDGMENT OF THE COURT
HAVING JURISDICTION MAY BE ENTERED UPON THE AWARD. THE DUTY TO ARBITRATE SHALL
SURVIVE THE CANCELLATION OR TERMINATION OF THIS LEASE.
13.10 Default by Landlord.
13.10.1 LANDLORD DEFAULT; OPPORTUNITY TO CURE. IF LANDLORD FAILS TO
PERFORM OR OBSERVE ANY OF ITS LEASE OBLIGATIONS AND SUCH FAILURE CONTINUES
FOR MORE THAN THIRTY (30) DAYS AFTER TENANT HAS DELIVERED WRITTEN NOTICE
THEREOF TO LANDLORD AND LANDLORD'S MORTGAGEE ("Tenant's Default Notice"),
SUCH FAILURE SHALL CONSTITUTE A DEFAULT UNDER THIS LEASE; PROVIDED,
HOWEVER, THAT IF THE NATURE OF LANDLORD'S OBLIGATION IS SUCH THAT MORE THAN
THIRTY (30) DAYS ARE REQUIRED FOR PERFORMANCE THEN LANDLORD SHALL NOT BE IN
DEFAULT IF LANDLORD COMMENCES PERFORMANCE WITHIN SUCH THIRTY (30)-DAY
PERIOD AND THEREAFTER DILIGENTLY PROSECUTES THE SAME TO COMPLETION, EXCEPT
IN THE CASE OF AN EMERGENCY, THE REQUIRED NOTICE AND CURE PERIOD SHALL BE
THAT WHICH IS REASONABLE UNDER THE CIRCUMSTANCES. SUCH NOTICE AND GRACE
PERIODS SHALL NOT APPLY TO EXTEND THE TIME PERIODS APPLICABLE TO LANDLORD'S
RECONSTRUCTION OBLIGATIONS UNDER SECTION 10.1 HEREOF IN THE EVENT OF A
CASUALTY, NOR SHALL THEY APPLY TO LANDLORD'S OBLIGATION TO "SUBSTANTIALLY
COMPLETE" THE "LANDLORD'S EXPANSION WORK" UNDER SECTION 19.6.1 HEREOF
(WHICH SECTION 19.6.1 CONTAINS ITS OWN APPLICABLE NOTICE AND CURE
PROVISIONS AND IN WHICH SUCH TERMS ARE DEFINED); PROVIDED, HOWEVER, THAT
THE PERFORMANCE AND COMPLIANCE BY LANDLORD WITH ITS OTHER OBLIGATIONS UNDER
ARTICLE 19 HEREOF SHALL BE SUBJECT TO THE DEFAULT PROVISIONS OF THIS
SECTION 13.10, INCLUDING THE RIGHTS GRANTED TO LANDLORD AND TENANT
HEREUNDER WITH RESPECT TO ANY SUCH LANDLORD DEFAULT. TENANT'S DEFAULT
NOTICE SHALL IDENTIFY THE LEASE PROVISIONS CONTAINING THE LANDLORD'S
OBLIGATIONS
THAT ARE THE SUBJECT OF TENANT'S COMPLAINT AND SPECIFY IN REASONABLE DETAIL THE NATURE AND EXTENT OF LANDLORD'S FAILURE WITH RESPECT THERETO. IF LANDLORD OR LANDLORD'S MORTGAGEE FAILS TO CURE ANY SUCH DEFAULT WITHIN THE APPLICABLE GRACE PERIOD, TENANT MAY PURSUE ANY REMEDIES GIVEN IN THIS LEASE OR UNDER THE LAW AND IN EQUITY, SUBJECT TO LANDLORD'S RIGHT TO DELIVER A "LANDLORD'S DISPUTE NOTICE" (AS DEFINED IN SECTION 13.10.2 BELOW).
13.10.2 Tenant Self-Help Rights; Landlord's Dispute Notice. If Landlord defaults: (a) in the performance of any of its Lease covenants (excluding its obligation to Substantially Complete Landlord's Expansion Work under Section 19.6.1) beyond the applicable grace period provided in this Section 13.10 above due to any reason within its control (except by reason of Tenant's default in its Lease obligations or as the result of Tenant's actions) and such default results in an interruption in an "ESSENTIAL SERVICE" (as defined below), or (b) in its obligation to Substantially Complete Landlord's Expansion Work within the time period required by Section 19.6.1, subject to the effect of the grace and extension periods provided in such Section, and (c) Tenant notifies Landlord and Landlord's Mortgagee in writing of such default and identifies its proposed curative actions (the "TENANT'S NOTICE OF INTENT TO EXERCISES SELF-HELP"), then, in such event, Tenant shall have the right to remedy such Landlord's default by completing such repair or construction work as necessary to restore or provide such Essential Service if:
(i) no event has occurred that with the passing of time or going of notice, or both, would constitute an Event of Default; and no Event of Default has occurred and is outstanding; and
(ii) Tenant's conducts all such remedial work in accordance with the terms of this Lease, including without limitation, the Rules and Regulations.
Tenant's right to undertake any such repairs shall be limited to such repairs that do not adversely affect the structural components of the Building or any Building systems that serve other Building tenants, if any. Notwithstanding anything herein to the contrary, if Landlord disputes in writing the occurrence of any such default or the proposed curative actions identified by Tenant in Tenant's Notice of Intent to Exercise Self-Help, and Landlord delivers written notice of such dispute (the "LANDLORD'S DISPUTE NOTICE") to Tenant within ten (10) business days following its receipt Tenant's Notice of Intent to Exercise Self-Help, then, Tenant shall not have the right to remedy the claimed Landlord default until the disputed matter is submitted to, and determined by, the binding arbitration procedure set forth in Section 13.9 hereof and the result is the decision by the arbitrator that Landlord did default in its obligation to provide an Essential Service or to Substantially Complete the Landlord's Expansion Work within the required time frame, as applicable.
13.10.3 Tenant's Setoff Rights. In the event that Tenant undertakes and completes such repair and construction work in compliance with the terms and conditions of this Section 13.10, Landlord shall be responsible for the reasonable costs of Tenant's work and Landlord shall pay Tenant such costs within thirty (30) days of its receipt of Tenant's written invoice therefor, which shall be delivered to Landlord and Landlord's Mortgagee together with supporting permits, receipts, lien waivers, and other documentation reasonably required by Landlord to verify the completion of such work and Tenant's payment thereof (the "LANDLORD REPAIR EXPENSES"). If Landlord fails to pay to Tenant the Landlord Repair Expenses within such thirty (30) day period following Tenant's submission of such documentation, Tenant may set-off the amount of such Landlord Repair Expenses against its future scheduled monthly installments of Annual Base Rent until such Landlord Repair Expenses are repaid to Tenant thereby; subject, however, to the condition that (a) Tenant shall provide Landlord and Landlord's Mortgagee with at least ten (10) days prior written notice of its intention to set-off any
such amount from a scheduled monthly installment of Annual Base Rent, and
(b) Tenant may not set-off more than ten (10%) percent of any scheduled
monthly installment of Annual Base Rent. Landlord acknowledges and agrees
that if the Tenant has not been paid the Landlord Repair Expenses in full
by the end of the Term, Tenant's right to collect the remaining balance
thereof shall survive the expiration of the Term.
13.10.4 Essential Services. As used herein, the term "ESSENTIAL SERVICES" shall mean (a) Landlord's Replacement Obligations, and (b) any service required to be provided by Landlord under Section 6.1 of this Lease, the failure of which materially and adversely interferes with the conduct of Tenant's normal business operations in a material portion of the Premises or materially and adversely affects the health or safety of Tenant's employees or Tenant's Property.
13.11 Waivers.
13.11.1 PREJUDGMENT REMEDIES - COMMERCIAL TRANSACTION. TENANT HEREBY REPRESENTS, COVENANTS AND AGREES THAT IT IS ENGAGED PRIMARILY IN COMMERCIAL PURSUITS, AND THAT THE LEASE IS A "COMMERCIAL TRANSACTION" WITHIN THE MEANING OF SECTION 52-278A(A) OF THE CONNECTICUT GENERAL STATUTES (REV. 1958), AS AMENDED. TENANT HEREBY WAIVES ALL RIGHTS TO NOTICE, PRIOR JUDICIAL HEARING OR COURT ORDER UNDER SECTION 52-278A ET SEQ. OF THE CONNECTICUT GENERAL STATUTES (REV. 1958) AS AMENDED OR UNDER ANY OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDIES THE LANDLORD MAY EMPLOY TO ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER.
13.11.2 TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, OR TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY EMERGENCY OR OTHER STATUTORY REMEDY WITH RESPECT THERETO.
ARTICLE 14 NONDISTURBANCE AND RIGHTS OF MORTGAGE HOLDERS
14.1 Subordination.
14.1.1 SUBORDINATION AGREEMENT. THIS LEASE AND ALL OF TENANT'S RIGHTS HEREUNDER ARE, AND SHALL BE, SUBJECT AND SUBORDINATE AT ALL TIMES TO ANY MORTGAGES (EACH, A "Mortgage") WHICH MAY NOW EXIST OR HEREAFTER AFFECT THE PROPERTY, OR ANY PORTION THEREOF, IN ANY AMOUNT, AND TO ALL RENEWALS, MODIFICATIONS, CONSOLIDATIONS, REPLACEMENTS, AND EXTENSIONS OF SUCH MORTGAGES, SUBJECT TO SUCH MORTGAGEE'S GRANT OF NON-DISTURBANCE RIGHTS TO TENANT, MORE FULLY DESCRIBED BELOW. THIS SECTION SHALL BE SELF-OPERATIVE AND NO FURTHER SUBORDINATION SHALL BE REQUIRED. IN CONFIRMATION OF SUCH SUBORDINATION, TENANT SHALL PROMPTLY EXECUTE, ACKNOWLEDGE AND DELIVER ANY INSTRUMENT THAT LANDLORD OR THE HOLDER OF ANY MORTGAGE OR ITS ASSIGNS OR SUCCESSORS IN INTEREST (EACH SUCH HOLDER, A "Mortgagee") MAY REASONABLY REQUEST TO EVIDENCE SUCH SUBORDINATION AND NON-DISTURBANCE. TENANT'S AGREEMENT TO SUBORDINATE THIS LEASE AND ITS RIGHTS HEREUNDER AS TO ANY FUTURE MORTGAGES IS SUBJECT TO THE CONDITION THAT LANDLORD DELIVERS TO TENANT A RECORDABLE SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT ON THE COMMERCIALLY REASONABLE STANDARD FORM THEN UTILIZED BY THE HOLDER OF ANY SUCH MORTGAGE.
14.1.2 ATTORNMENT AGREEMENT. IN THE EVENT THAT ANY SUCH FIRST MORTGAGE
IS FORECLOSED OR A CONVEYANCE IN LIEU OF FORECLOSURE IS MADE FOR ANY
REASON, TENANT SHALL, AUTOMATICALLY ATTORN TO AND BECOME THE TENANT OF THE
SUCCESSOR IN INTEREST TO LANDLORD AT THE OPTION OF SUCH SUCCESSOR IN
INTEREST. TENANT COVENANTS AND AGREES TO EXECUTE AND DELIVER, WITHIN TEN
(10) DAYS FOLLOWING DELIVERY OF REQUEST BY LANDLORD, MORTGAGEE, OR BY
LANDLORD'S SUCCESSOR IN INTEREST AND IN A COMMERCIALLY REASONABLE FORM
REQUESTED BY LANDLORD, MORTGAGEE, OR BY LANDLORD'S SUCCESSOR IN INTEREST,
ANY ADDITIONAL DOCUMENTS EVIDENCING THE PRIORITY OR SUBORDINATION OF THIS
LEASE WITH RESPECT TO THE LIEN OF ANY SUCH FIRST MORTGAGE, WHICH ADDITIONAL
COMMERCIALLY REASONABLE DOCUMENTS SHALL BE REASONABLE SATISFACTORY TO
TENANT, LANDLORD, MORTGAGEE, AND LANDLORD'S SUCCESSORS IN INTEREST.
14.1.3 MORTGAGEE EXCULPATION FOR CERTAIN MATTERS. IF ANY MORTGAGEE SHALL SUCCEED TO THE INTEREST OF LANDLORD UNDER THIS LEASE, SUCH MORTGAGEE SHALL ASSUME AND PERFORM LANDLORD'S OBLIGATIONS UNDER THIS LEASE ONLY WHILE IT IS THE FEE OWNER OF THE BUILDING AND SHALL NOT BE (A) LIABLE FOR ANY BREACH, ACT OR OMISSION OF ANY PRIOR LANDLORD, INCLUDING LANDLORD, PROVIDED, HOWEVER, THAT WITH RESPECT TO CONTINUING DEFAULTS, MORTGAGEE SHALL ONLY BE RESPONSIBLE TO CURE ANY DEFAULTS IN LANDLORD'S OBLIGATIONS UNDER THE LEASE WHICH EXIST ON OR ARISE AFTER THE DATE THAT MORTGAGEE ACQUIRES TITLE TO THE PROPERTY, BUT NOT FOR ANY DAMAGES OR CLAIMS WHICH ARISE PRIOR TO THE DATE THAT MORTGAGEE ACQUIRES TITLE TO THE PROPERTY; (B) SUBJECT TO OFFSETS, CLAIMS OR DEFENSES WHICH TENANT MIGHT HAVE AGAINST PRIOR LANDLORDS PROVIDED, HOWEVER, THAT WITH RESPECT TO CONTINUING DEFAULTS, MORTGAGEE SHALL ONLY BE RESPONSIBLE TO CURE ANY DEFAULTS IN LANDLORD'S OBLIGATIONS UNDER THE LEASE WHICH EXIST ON OR ARISE AFTER THE DATE THAT MORTGAGEE ACQUIRES TITLE TO THE PROPERTY, BUT NOT FOR ANY DAMAGES OR CLAIMS WHICH ARISE PRIOR TO THE DATE THAT MORTGAGEE ACQUIRES TITLE TO THE PROPERTY; (C) BOUND BY THE PAYMENT OF RENT OR OTHER PAYMENT IN LIEU OF RENT WHICH TENANT MAY HAVE PAID TO ANY PRIOR LANDLORD FOR MORE THAN ONE (1) MONTH IN ADVANCE OF ITS DUE DATE; (D) BOUND BY ANY ASSIGNMENT, SURRENDER, TERMINATION, WAIVER, LEASE AMENDMENT OR MODIFICATION OF OR AFFECTING THIS LEASE MADE WITHOUT ITS CONSENT EXCEPT ANY SUCH RIGHT THAT IS EXPRESSLY GRANTED TO TENANT IN THIS LEASE WITHOUT ANY REQUIREMENT FOR LANDLORD'S PRIOR APPROVAL; OR (E) LIABLE FOR ANY PORTION OF A SECURITY DEPOSIT NOT ACTUALLY RECEIVED BY SUCH MORTGAGE HOLDER.
14.2 Notices. IF TENANT IS GIVEN WRITTEN NOTICE OF THE IDENTITY AND ADDRESS OF ANY MORTGAGEE, THEN TENANT SHALL GIVE TO SUCH MORTGAGEE WRITTEN NOTICE OF ANY DEFAULT BY LANDLORD UNDER THE TERMS OF THIS LEASE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY REPUTABLE OVERNIGHT CARRIER, AND SUCH MORTGAGEE SHALL BE GIVEN THE OPPORTUNITY TO CURE LANDLORD'S DEFAULT WITHIN THE THIRTY (30) DAYS FOLLOWING SUCH WRITTEN NOTICE; PROVIDED, HOWEVER, THAT SAID THIRTY (30)-DAY PERIOD SHALL BE EXTENDED SO LONG AS WITHIN SAID THIRTY (30)-DAY PERIOD SUCH PARTY HAS COMMENCED TO CURE THE DEFAULT AND SUCH PARTY IS PROCEEDING WITH DUE DILIGENCE (INCLUDING THE EXERCISE OF ITS REMEDIES AGAINST LANDLORD IF NECESSARY TO OBTAIN POSSESSION OF THE PREMISES) TO EFFECT SUCH CURE.
14.3 Estoppel Certificates. TENANT SHALL AT ANY TIME, AND FROM TIME TO
TIME, UPON NOT LESS THAN TEN (10) DAYS PRIOR WRITTEN NOTICE FROM LANDLORD
EXECUTE, ACKNOWLEDGE AND DELIVER TO LANDLORD, TO ANY PROSPECTIVE PURCHASER, OR
MORTGAGEE, A WRITTEN CERTIFICATE OF TENANT SUBSTANTIALLY IN THE FORM OF EXHIBIT
G ATTACHED HERETO (OR IN SUCH OTHER FORM AS MAY BE REQUIRED BY LANDLORD)
STATING: (A) WHETHER TENANT HAS ACCEPTED THE PREMISES AND THE COMMENCEMENT DATE
AND TERMINATION DATE OF THIS LEASE; (B) THAT THIS LEASE IS UNMODIFIED AND IN
FULL FORCE AND EFFECT (OR IF THERE HAVE BEEN MODIFICATIONS, THAT THE SAME IS IN
FULL FORCE AND EFFECT AS MODIFIED AND STATING THE MODIFICATIONS), AND HAS NOT
BEEN ASSIGNED; (C) THAT THERE ARE NOT, TO TENANT'S BEST KNOWLEDGE, ANY UNCURED
DEFAULTS ON THE PART OF THE LANDLORD OR TENANT HEREUNDER, OR SPECIFYING ANY
DEFAULTS THAT MAY EXIST; (D) WHETHER OR NOT THERE ARE THEN EXISTING ANY DEFENSES
AGAINST THE ENFORCEMENT OF ANY OF THE OBLIGATIONS OF TENANT UNDER THIS LEASE
(AND, IF SO, SPECIFYING SAME); (E) WHETHER TENANT HAS RECEIVED
ALL REQUIRED CONTRIBUTIONS FROM LANDLORD ON ACCOUNT OF TENANT'S IMPROVEMENTS;
(F) THE DATES, IF ANY, TO WHICH THE ANNUAL BASE RENT AND ADDITIONAL RENT AND
OTHER CHARGES UNDER THIS LEASE HAVE BEEN PAID AND THE AMOUNTS OF SAID ANNUAL
BASE RENT AND ADDITIONAL RENT, AND THAT NO ANNUAL BASE RENT, ADDITIONAL RENT, OR
SECURITY DEPOSIT HAS BEEN PAID IN ADVANCE OF ITS DUE DATE, AND (G) ANY OTHER
INFORMATION THAT MAY REASONABLY BE REQUIRED BY ANY OF SUCH PERSONS. IT IS
INTENDED THAT ANY SUCH CERTIFICATE OF TENANT DELIVERED PURSUANT TO THIS SECTION
14.3 MAY BE RELIED UPON BY LANDLORD AND ANY PROSPECTIVE PURCHASER OR THE
MORTGAGEE OF ANY PART OF THE BUILDING.
14.4 Quiet Enjoyment. UPON TENANT PAYING THE ANNUAL BASE RENT AND ADDITIONAL RENT AND PERFORMING ALL OF TENANT'S OBLIGATIONS UNDER THIS LEASE, TENANT MAY PEACEFULLY AND QUIETLY ENJOY THE PREMISES DURING THE TERM AS AGAINST ALL PERSONS OR ENTITIES LAWFULLY CLAIMING BY OR THROUGH LANDLORD; SUBJECT, HOWEVER, TO THE PROVISIONS OF THIS LEASE AND TO THE RIGHTS OF LANDLORD'S MORTGAGEE.
ARTICLE 15 NOTICES
15.1 Manner of Notice.
15.1.1 NOTICES; ADDRESSES. ALL NOTICES, DEMANDS AND OTHER COMMUNICATIONS ("notices") PERMITTED OR REQUIRED TO BE GIVEN UNDER THIS LEASE SHALL BE IN WRITING AND SENT BY PERSONAL SERVICE, CERTIFIED MAIL (POSTAGE PREPAID) RETURN RECEIPT REQUESTED OR BY A NATIONALLY RECOGNIZED OVERNIGHT COURIER SERVICE TO THE FOLLOWING ADDRESSES OR TO SUCH OTHER ADDRESS AS EITHER LANDLORD OR TENANT MAY DESIGNATE AS ITS NEW ADDRESS FOR SUCH PURPOSE BY NOTICE GIVEN TO THE OTHER IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 15.1:
If to Tenant: CAS Medical Systems, Inc.
44 East Industrial Drive
Branford, Connecticut 06405
Attn: Jeffrey A. Baird, Chief Financial Officer
With copies to: Pamela Millman
Wiggin and Dana LLP
265 Church Street
New Haven, CT 06510
If to Landlord: DMP New Branford, LLC
c/o Davis Marcus Partners, Inc.
One Appleton Street
Boston, MA 02116
With copies to: David P. Fiore
Davis Marcus Partners, Inc.
200 Connecticut Avenue
Norwalk, CT 06854
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15.1.2 DELIVERY. NOTICES SHALL BE DEEMED TO HAVE BEEN GIVEN (A) WHEN HAND DELIVERED (PROVIDED THAT DELIVERY SHALL BE EVIDENCED BY A RECEIPT EXECUTED BY OR ON BEHALF OF THE ADDRESSEE IF DELIVERED BY PERSONAL SERVICE) IF PERSONAL SERVICE IS USED, (B) THE DATE OF RECEIPT THEREOF OR DATE OF REFUSAL TO ACCEPT IF SENT BY POSTAGE PRE-PAID REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND (D) ONE (1) DAY AFTER BEING SENT BY FEDERAL EXPRESS OR OTHER REPUTABLE OVERNIGHT COURIER SERVICE (WITH DELIVERY EVIDENCED BY WRITTEN RECEIPT) IF OVERNIGHT COURIER SERVICE IS USED.
ARTICLE 16 MISCELLANEOUS
16.1 Brokers. LANDLORD AND TENANT WARRANT TO EACH OTHER THAT THEY HAVE HAD NO DEALINGS WITH ANY BROKER, AGENT OR FINDER IN CONNECTION WITH THIS LEASE EXCEPT OR & L COMMERCIAL (THE "Brokers"). TENANT AGREES TO PAY THE COMMISSIONS DUE TO SUCH BROKERAGE COMPANY PURSUANT TO SEPARATE AGREEMENTS. BOTH PARTIES HERETO AGREE TO PROTECT, INDEMNIFY AND HOLD HARMLESS THE OTHER FROM AND AGAINST ANY AND ALL EXPENSES WITH RESPECT TO ANY COMPENSATION, COMMISSIONS AND CHARGES CLAIMED BY ANY OTHER BROKER, AGENT OR FINDER NOT IDENTIFIED ABOVE WITH RESPECT TO THIS LEASE OR THE NEGOTIATION THEREOF THAT IS MADE BY REASON OF ANY ACTION OR AGREEMENT BY SUCH PARTY.
16.2 Building Name.
(a) DURING ANY PERIOD THAT CAS MEDICAL SYSTEMS, INC. IS THE SOLE TENANT OF THE BUILDING AND THE PROPERTY, TENANT SHALL HAVE THE RIGHT TO DESIGNATE THE NAME OF THE BUILDING, (BUT LANDLORD RESERVES THE RIGHT TO DESIGNATE THE NAME OF THE PROPERTY).
(b) DURING ANY PERIOD THAT CAS MEDICAL SYSTEMS, INC. IS NOT THE SOLE TENANT OF THE BUILDING AND THE PROPERTY MAY BE KNOWN BY SUCH NAME AS LANDLORD, IN ITS SOLE DISCRETION, MAY ELECT, AND LANDLORD SHALL HAVE THE RIGHT FROM TIME TO TIME TO CHANGE SUCH DESIGNATION OR NAME WITHOUT TENANT'S CONSENT UPON PRIOR WRITTEN NOTICE TO TENANT.
(c) DURING ANY PERIOD THAT CAS MEDICAL SYSTEMS, INC. IS NOT THE SOLE TENANT OF THE PROPERTY, THE PROPERTY MAY BE KNOWN BY SUCH NAME AS LANDLORD, IN ITS SOLE DISCRETION, MAY ELECT, AND LANDLORD SHALL HAVE THE RIGHT FROM TIME TO TIME TO CHANGE SUCH DESIGNATION OR NAME WITHOUT TENANT'S CONSENT UPON PRIOR WRITTEN NOTICE TO TENANT. THESE SS.16.2 PROVISIONS SHALL NOT BE DEEMED TO MODIFY TENANT'S SIGNAGE RIGHTS HEREUNDER.
16.3 Authority. IF TENANT SIGNS AS A CORPORATION, LIMITED LIABILITY COMPANY, OR A PARTNERSHIP, OR OTHER BUSINESS ENTITY EACH PERSON EXECUTING THIS LEASE ON BEHALF OF TENANT HEREBY COVENANTS AND WARRANTS THAT TENANT IS A DULY AUTHORIZED AND EXISTING ENTITY, THAT TENANT IS DULY QUALIFIED TO DO BUSINESS IN CONNECTICUT, THAT TENANT HAS FULL RIGHT AND AUTHORITY TO ENTER INTO THIS LEASE, AND THAT EACH PERSON SIGNING ON BEHALF OF TENANT IS DULY AUTHORIZED TO DO SO AND THAT NO OTHER SIGNATURES ARE NECESSARY. UPON LANDLORD'S REQUEST, TENANT SHALL PROVIDE LANDLORD WITH EVIDENCE REASONABLY SATISFACTORY TO LANDLORD CONFIRMING THE FOREGOING COVENANTS AND WARRANTIES. IF LANDLORD SIGNS AS A CORPORATION, LIMITED LIABILITY COMPANY, OR A PARTNERSHIP, OR OTHER BUSINESS ENTITY EACH PERSON EXECUTING THIS LEASE ON BEHALF OF LANDLORD HEREBY COVENANTS AND WARRANTS THAT LANDLORD IS A DULY AUTHORIZED AND EXISTING ENTITY, THAT LANDLORD IS DULY QUALIFIED TO DO BUSINESS IN CONNECTICUT, THAT LANDLORD HAS FULL RIGHT AND AUTHORITY TO ENTER INTO THIS LEASE, AND THAT EACH PERSON SIGNING ON BEHALF OF LANDLORD IS DULY AUTHORIZED TO DO SO AND THAT NO OTHER SIGNATURES ARE NECESSARY. UPON TENANT'S REQUEST, LANDLORD SHALL PROVIDE TENANT WITH EVIDENCE REASONABLY SATISFACTORY TO TENANT CONFIRMING THE FOREGOING COVENANTS AND WARRANTIES.
16.4 Interpretation. THE WORDS "Landlord" AND "Tenant" AS USED HEREIN SHALL
INCLUDE THE PLURAL AS WELL AS THE SINGULAR. THE WORDS USED IN NEUTER GENDER
INCLUDE THE MASCULINE AND FEMININE. IF THERE IS MORE THAN ONE TENANT, THE
OBLIGATIONS UNDER THIS LEASE IMPOSED ON TENANT SHALL BE JOINT AND SEVERAL. THE
CAPTIONS PRECEDING THE ARTICLES OF THIS LEASE HAVE BEEN INSERTED SOLELY AS A
MATTER OF CONVENIENCE AND SUCH CAPTIONS IN NO WAY DEFINE OR LIMIT THE SCOPE OR
INTENT OF ANY PROVISION OF THIS LEASE. THIS LEASE MAY BE EXECUTED IN SEVERAL
COUNTERPARTS AND BY EACH PARTY ON A SEPARATE COUNTERPART, EACH OF WHICH, WHEN SO
EXECUTED AND DELIVERED, SHALL BE AN ORIGINAL AND ALL OF WHICH TOGETHER SHALL
CONSTITUTE ONE INSTRUMENT.
16.5 Modifications. NEITHER THIS LEASE NOR ANY TERM OR PROVISION HEREOF MAY BE CHANGED, WAIVED, DISCHARGED OR TERMINATED ORALLY, AND NO BREACH THEREOF SHALL BE WAIVED,
ALTERED OR MODIFIED, EXCEPT BY A WRITTEN INSTRUMENT SIGNED BY THE PARTY AGAINST WHICH THE ENFORCEMENT OF THE CHANGE, WAIVER, DISCHARGE OR TERMINATION IS SOUGHT. ANY RIGHT TO CHANGE, WAIVE, DISCHARGE, ALTER OR MODIFY, OR TERMINATE THIS LEASE SHALL BE SUBJECT TO THE PRIOR EXPRESS WRITTEN CONSENT OF LANDLORD'S MORTGAGEE, EXCEPT ANY SUCH RIGHT THAT IS EXPRESSLY GRANTED TO TENANT IN THIS LEASE WITHOUT ANY REQUIREMENT FOR LANDLORD'S PRIOR APPROVAL.
16.6 Severability. IF ANY PROVISION OF THIS LEASE OR THE APPLICATION THEREOF TO ANY PERSON OR CIRCUMSTANCE SHALL, TO ANY EXTENT, BE INVALID OR UNENFORCEABLE, THE REMAINDER OF THIS LEASE, OR THE APPLICATION OF SUCH PROVISION TO PERSONS OR CIRCUMSTANCES OTHER THAN THOSE AS TO WHICH IT IS INVALID OR UNENFORCEABLE, SHALL NOT BE AFFECTED THEREBY, AND EACH PROVISION OF THIS LEASE SHALL BE VALID AND ENFORCEABLE TO THE FULL EXTENT PERMITTED BY LAW.
16.7 Entire Agreement. LANDLORD'S EMPLOYEES, REPRESENTATIVES AND AGENTS HAVE NO AUTHORITY TO MAKE OR AGREE TO MAKE A LEASE OR ANY OTHER AGREEMENT OR UNDERTAKING IN CONNECTION HEREWITH. THE SUBMISSION OF THIS DOCUMENT FOR EXAMINATION AND NEGOTIATION DOES NOT CONSTITUTE AN OFFER TO LEASE, OR A RESERVATION OF, OR OPTION FOR, THE PREMISES, AND THIS DOCUMENT SHALL BE EFFECTIVE AND BINDING ONLY UPON THE EXECUTION AND DELIVERY HEREOF BY BOTH LANDLORD AND TENANT. THIS LEASE, INCLUDING THE EXHIBITS HERETO, WHICH ARE MADE
PART OF THIS LEASE, CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES AND ALL PRIOR
NEGOTIATIONS AND AGREEMENTS ARE MERGED HEREIN. NEITHER LANDLORD NOR LANDLORD'S AGENTS HAVE MADE ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE PREMISES, THE BUILDING OR THIS LEASE EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND NO RIGHTS, EASEMENTS OR LICENSES ARE OR SHALL BE ACQUIRED BY TENANT BY IMPLICATION OR OTHERWISE UNLESS EXPRESSLY SET FORTH HEREIN. TENANT COVENANTS AND AGREES THAT NO DIMINUTION OF LIGHT, AIR OR VIEW BY ANY STRUCTURE THAT MAY HEREAFTER BE ERECTED (WHETHER OR NOT BY LANDLORD) SHALL ENTITLE TENANT TO ANY REDUCTION OF ANNUAL BASE RENT OR ADDITIONAL RENT UNDER THIS LEASE, RESULT IN ANY LIABILITY OF LANDLORD OR TENANT, OR IN ANY OTHER WAY AFFECT THIS LEASE OR TENANT'S OBLIGATIONS HEREUNDER.
16.8 No Merger. THERE SHALL BE NO MERGER OF THIS LEASE OR OF THE LEASEHOLD ESTATE HEREBY CREATED WITH THE FEE ESTATE IN THE PREMISES OR ANY PART THEREOF BY REASON OF THE FACT THAT THE SAME PERSON MAY ACQUIRE OR HOLD, DIRECTLY OR INDIRECTLY, THIS LEASE OR THE LEASEHOLD ESTATE HEREBY CREATED OR ANY INTEREST IN THIS LEASE OR IN SUCH LEASEHOLD ESTATE AS WELL AS THE FEE ESTATE IN THE LEASEHOLD PREMISES OR ANY INTEREST IN SUCH FEE ESTATE.
16.9 Easements. LANDLORD RESERVES THE RIGHT, FROM TIME TO TIME, TO GRANT EASEMENTS AND RIGHTS, MAKE DEDICATIONS, AGREE TO RESTRICTIONS AND RECORD MAPS AFFECTING THE PROPERTY AS LANDLORD MAY DEEM NECESSARY OR DESIRABLE, SO LONG AS SUCH EASEMENTS, RIGHTS, DEDICATIONS, RESTRICTIONS, AND MAPS DO NOT UNREASONABLY INTERFERE WITH THE USE OF, OR ACCESS TO THE PREMISES, OR PARKING RIGHTS BY TENANT; AND THIS LEASE SHALL BE SUBORDINATE TO SUCH INSTRUMENTS.
16.10 Bind and Inure. THE TERMS, PROVISIONS, COVENANTS AND CONDITIONS CONTAINED IN THIS LEASE SHALL BIND AND INURE TO THE BENEFIT OF LANDLORD AND TENANT, AND, EXCEPT AS OTHERWISE PROVIDED HEREIN, THEIR RESPECTIVE HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS. IF TWO OR MORE INDIVIDUALS, CORPORATIONS, PARTNERSHIPS OR OTHER BUSINESS ASSOCIATIONS (OR ANY COMBINATION OF TWO OR MORE THEREOF) SHALL SIGN THIS LEASE AS TENANT, THE LIABILITY OF EACH SUCH INDIVIDUAL, CORPORATION, PARTNERSHIP OR OTHER BUSINESS ASSOCIATION TO PAY RENT AND PERFORM ALL OTHER OBLIGATIONS HEREUNDER SHALL BE DEEMED TO BE JOINT AND SEVERAL. ALL AGREEMENTS, COVENANTS AND INDEMNIFICATIONS CONTAINED HEREIN OR MADE IN WRITING PURSUANT TO THE TERMS OF THIS LEASE BY OR ON BEHALF OF TENANT SHALL BE DEEMED MATERIAL AND SHALL SURVIVE EXPIRATION OR SOONER TERMINATION OF THIS LEASE.
16.11 Remedies Cumulative; No Waiver. NO REMEDY OR ELECTION HEREUNDER SHALL
BE DEEMED EXCLUSIVE, BUT SHALL WHEREVER POSSIBLE, BE CUMULATIVE WITH ALL OTHER
REMEDIES AT LAW OR IN EQUITY. NO WAIVER OF ANY PROVISION HEREOF SHALL BE DEEMED
A WAIVER OF ANY OTHER
PROVISION HEREOF OR OF ANY SUBSEQUENT BREACH OF THE SAME OR ANY OTHER PROVISION. NO WAIVER OF ANY BREACH SHALL AFFECT OR ALTER THIS LEASE, BUT EACH AND EVERY TERM, COVENANT AND CONDITION OF THIS LEASE SHALL CONTINUE IN FULL FORCE AND EFFECT WITH RESPECT TO ANY OTHER THEN EXISTING OR SUBSEQUENT BREACH THEREOF. NO REFERENCE TO ANY SPECIFIC RIGHT OR REMEDY SHALL PRECLUDE THE EXERCISE OF ANY OTHER RIGHT OR REMEDY PERMITTED HEREUNDER OR THAT MAY BE AVAILABLE AT LAW OR IN EQUITY. NO FAILURE BY LANDLORD TO INSIST UPON THE STRICT PERFORMANCE OF ANY AGREEMENT, TERM, COVENANT OR CONDITION HEREOF, OR TO EXERCISE ANY RIGHT OR REMEDY CONSEQUENT UPON A BREACH THEREOF, AND NO ACCEPTANCE OF FULL OR PARTIAL RENT DURING THE CONTINUANCE OF ANY SUCH BREACH, SHALL CONSTITUTE A WAIVER OF ANY SUCH BREACH, AGREEMENT, TERM, COVENANT OR CONDITION.
16.12 Tenant's Financial Statements.
16.12.1 DELIVERY OF FINANCIAL STATEMENTS. TENANT SHALL FURNISH LANDLORD ANNUALLY, WITHIN NINETY (90) DAYS AFTER THE END OF EACH FISCAL YEAR OF TENANT (AND AT SUCH OTHER TIMES AS MAY BE REQUIRED BY THE TERMS OF THIS LEASE), COPIES OF THE BALANCE SHEETS OF TENANT, AS AT THE CLOSE OF SUCH FISCAL YEAR, AND STATEMENTS OF INCOME AND RETAINED EARNINGS OF TENANT FOR SUCH YEAR, PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND AUDITED BY TENANT'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS (IF AUDITED FINANCIAL STATEMENTS FOR SUCH FISCAL YEAR ARE AVAILABLE AT SUCH TIME). IF AUDITED FINANCIAL STATEMENTS FOR THE MOST RECENTLY ENDED FISCAL YEAR ARE NOT AVAILABLE AT THE TIME OF SUCH REQUEST BY LANDLORD, TENANT SHALL PROVIDE ITS MOST RECENT UNAUDITED FINANCIAL STATEMENTS AS ARE THEN AVAILABLE CERTIFIED BY TENANT'S CHIEF FINANCIAL OFFICER TO BE TRUE AND CORRECT. TENANT ALSO AGREES TO FURNISH TO LANDLORD WITHIN TEN (10) DAYS FOLLOWING LANDLORD'S WRITTEN REQUEST THEREFOR, COPIES OF SUCH FINANCIAL STATEMENTS IDENTIFIED ABOVE AS ARE THEN AVAILABLE AND FINANCIAL STATEMENTS FOR THE THEN CURRENT FISCAL YEAR PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ON AN UNAUDITED BASIS CERTIFIED AS TRUE AND CORRECT BY SUCH COMPANY'S CHIEF FINANCIAL OFFICER.
16.12.2 Public Financial Information. Notwithstanding anything to the contrary herein, Tenant shall not be obligated to proved Landlord with financial information required to be delivered under Subsection 16.12.1 during any period that: (a) CAS Medical Systems, Inc. is the Tenant hereunder and is a U.S. corporation; and (b) such financial information is publicly available through the U.S. Securities and Exchange Commission or other governmental regulatory body.
16.13 Attorneys' Fees. IN ANY LITIGATION BETWEEN THE PARTIES REGARDING THIS LEASE, THE LOSING PARTY SHALL PAY TO THE PREVAILING PARTY ALL REASONABLE EXPENSES AND COURT COSTS INCLUDING REASONABLE ATTORNEYS' FEES INCURRED BY THE PREVAILING PARTY. A PARTY SHALL BE CONSIDERED THE PREVAILING PARTY IF: (A) IT INITIATED THE LITIGATION AND SUBSTANTIALLY OBTAINS THE RELIEF IT SOUGHT, EITHER THROUGH A JUDGMENT OR THE LOSING PARTY'S VOLUNTARY ACTION BEFORE ARBITRATION (AFTER IT IS SCHEDULED), TRIAL OR JUDGMENT; (B) THE OTHER PARTY WITHDRAWS ITS ACTION WITHOUT SUBSTANTIALLY OBTAINING THE RELIEF IT SOUGHT OR JUDGMENT IS ENTERED DISMISSING THE OTHER PARTY'S ACTION OR GRANTING SUMMARY JUDGMENT AGAINST THE OTHER PARTY; OR (C) IT DID NOT INITIATE THE LITIGATION AND JUDGMENT IS ENTERED FOR EITHER PARTY, BUT WITHOUT SUBSTANTIALLY GRANTING THE RELIEF SOUGHT.
16.14 Landlord Approvals. WHENEVER TENANT IS REQUIRED TO OBTAIN LANDLORD'S CONSENT HEREUNDER, TENANT AGREES TO REIMBURSE LANDLORD ALL OUT-OF-POCKET EXPENSES INCURRED BY LANDLORD, INCLUDING REASONABLE ATTORNEY'S FEES IN ORDER TO REVIEW DOCUMENTATION OR OTHERWISE DETERMINE WHETHER TO GIVE ITS CONSENT. LANDLORD AGREES THAT TENANT'S OBLIGATION TO PAY SUCH EXPENSES HEREUNDER IS LIMITED TO $2,500.00 IN CONNECTION WITH EACH REQUESTED APPROVAL, EXCEPT APPROVALS REQUESTED BY TENANT UNDER ARTICLE 19 HEREOF WHICH SHALL BE GOVERNED BY THE TERMS CONTAINED IN SUCH ARTICLE 19. TENANT SHALL
PAY LANDLORD'S INVOICE FOR ANY SUCH AMOUNTS WITHIN TEN (10) DAYS FOLLOWING LANDLORD'S DELIVERY OF ITS INVOICE THEREFOR.
16.15 Landlord's Liability.
16.15.1 EFFECT OF TRANSFER. THE TERM "LANDLORD" AS USED HEREIN AND THROUGHOUT THE LEASE SHALL MEAN ONLY THE OWNER OR OWNERS AT THE TIME IN QUESTION OF LANDLORD'S INTEREST IN THIS LEASE. UPON ANY TRANSFER OF SUCH INTEREST, FROM AND AFTER THE DATE OF SUCH TRANSFER, LANDLORD HEREIN NAMED (AND IN CASE OF ANY SUBSEQUENT TRANSFERS THE THEN TRANSFEROR) SHALL BE RELIEVED OF ALL LIABILITY FOR THE PERFORMANCE OF ANY OBLIGATIONS ON THE
PART OF THE LANDLORD CONTAINED IN THIS LEASE, WHICH ACCRUE AFTER THE DATE
OF THE TRANSFER, AND WITH RESPECT TO ANY MONIES IN THE HANDS OF LANDLORD OR THE THEN TRANSFEROR AT THE TIME OF SUCH TRANSFER IN WHICH TENANT HAS AN INTEREST, LANDLORD SHALL BE RELIEVED OF ALL LIABILITY THEREFOR PROVIDED THAT SUCH MONIES ARE DELIVERED TO THE TRANSFEREE.
16.15.2 MONEY JUDGMENTS. THE OBLIGATIONS CONTAINED IN THIS LEASE TO BE PERFORMED BY LANDLORD SHALL BE BINDING ON LANDLORD'S SUCCESSORS AND ASSIGNS, ONLY DURING THEIR RESPECTIVE PERIODS OF OWNERSHIP. NEITHER LANDLORD NOR ANY OF ITS MEMBERS, PARTNERS, PRINCIPALS, SHAREHOLDERS, TRUSTEES, BENEFICIARIES OR OTHER PARTY HAVING AN INTEREST IN LANDLORD SHALL BE UNDER ANY PERSONAL LIABILITY WITH RESPECT TO ANY OF THE PROVISIONS, COVENANTS OR AGREEMENTS OF THIS LEASE. IF LANDLORD BECOMES OBLIGATED TO PAY TENANT A MONEY JUDGMENT ARISING OUT OF ANY FAILURE BY LANDLORD TO PERFORM ANY OF ITS OBLIGATIONS UNDER THIS LEASE, TENANT SHALL BE LIMITED FOR THE SATISFACTION OF THE MONEY JUDGMENT SOLELY TO LANDLORD'S INTEREST IN THE PROPERTY AND ANY INSURANCE PROCEEDS OR SALE PROCEEDS RELATING THERETO, AND NO OTHER PROPERTY OR ASSETS OF LANDLORD SHALL BE SUBJECT TO LEVY, EXECUTION OR OTHER ENFORCEMENT PROCEDURE WHATSOEVER FOR THE SATISFACTION OF THE MONEY JUDGMENT.
16.16 Force Majeure. LANDLORD SHALL BE EXCUSED FOR THE PERIOD OF ANY DELAY
IN THE PERFORMANCE OF ANY OBLIGATIONS HEREUNDER, WHEN PREVENTED FROM SO DOING BY
CAUSE OR CAUSES BEYOND LANDLORD'S CONTROL INCLUDING, WITHOUT LIMITATION, CIVIL
COMMOTION, WAR, LABOR DISPUTES OR STRIKES, GOVERNMENTAL REGULATIONS OR CONTROLS,
INSPECTION DELAYS BY GOVERNMENTAL AUTHORITIES, DELAYS IN OBTAINING GOVERNMENTAL
PERMITS, INABILITY TO OBTAIN ANY MATERIAL OR SERVICES, CASUALTY, ACTS OF GOD, OR
THE ELEMENTS ("Force Majeure"). TENANT SHALL SIMILARLY BE EXCUSED FOR DELAY IN
THE PERFORMANCE OF OBLIGATIONS HEREUNDER PROVIDED: (A) NOTHING CONTAINED IN THIS
SECTION OR ELSEWHERE IN THIS LEASE SHALL BE DEEMED TO EXCUSE OR PERMIT ANY DELAY
IN THE PAYMENT OF ANY SUMS OF MONEY REQUIRED HEREUNDER, OR ANY DELAY IN THE CURE
OF ANY DEFAULT WHICH MAY BE CURED BY THE PAYMENT OF MONEY; (B) NO RELIANCE BY
TENANT UPON THIS SECTION SHALL LIMIT OR RESTRICT IN ANY WAY LANDLORD'S RIGHT OF
SELF-HELP AS PROVIDED IN THIS LEASE. NEITHER PARTY SHALL BE ENTITLED TO RELY
UPON THIS SECTION UNLESS IT SHALL ADVISE THE OTHER IN WRITING, OF THE EXISTENCE
OF ANY FORCE MAJEURE PREVENTING THE PERFORMANCE OF AN OBLIGATION OF THE OTHER
PROMPTLY AFTER THE COMMENCEMENT OF THE FORCE MAJEURE.
16.17 Time of Essence. EXCEPT AS PROVIDED IN THE SECTION CAPTIONED "FORCE MAJEURE," TIME IS OF THE ESSENCE WITH RESPECT TO THE DUE PERFORMANCE OF THE TERMS, COVENANTS AND CONDITIONS HEREIN CONTAINED; PROVIDED, HOWEVER, THAT NO DELAY OR FAILURE TO ENFORCE ANY OF THE PROVISIONS HEREIN CONTAINED AND NO CONDUCT OR STATEMENT SHALL WAIVE OR AFFECT ANY OF LANDLORD'S RIGHTS HEREUNDER.
16.18 Submission. SUBMISSION OF THIS INSTRUMENT FOR EXAMINATION DOES NOT CONSTITUTE A RESERVATION OF OR OPTION FOR LEASE OF THE PREMISES AND IT IS NOT EFFECTIVE AS A LEASE OR OTHERWISE UNTIL THIS LEASE HAS BEEN EXECUTED BY BOTH LANDLORD AND TENANT AND A FULLY EXECUTED COPY HAS BEEN DELIVERED TO EACH.
16.19 Governing Law. THIS LEASE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CONNECTICUT.
ARTICLE 17 EXTENSION RIGHT
17.1 Right to Extend. LANDLORD GRANTS TENANT THE OPTION TO EXTEND THIS
LEASE WITH RESPECT TO THE ENTIRE PREMISES FOR TWO (2) ADDITIONAL, SUCCESSIVE
PERIODS OF FIVE (5) YEARS (THE "First Extension Period" AND "Second Extension
Period" RESPECTIVELY; AND EACH AN "Extension Period" AND COLLECTIVELY THE
"Extension Periods") SUBJECT TO EACH AND ALL OF THE FOLLOWING TERMS AND
CONDITIONS (EACH AN "Extension Option" AND COLLECTIVELY THE "Extension
Options"):
17.1.1 NO ASSIGNMENT OR SUBLEASE. THE EXTENSION OPTIONS MAY NOT BE
EXERCISED BY, OR ASSIGNED OR OTHERWISE TRANSFERRED TO ANY PERSON OR ENTITY
VOLUNTARILY OR INVOLUNTARILY, EXCEPT THE TENANT NAMED IN THIS LEASE OR AN
AFFILIATED COMPANY WHICH BECOMES THE ASSIGNEE OF THIS LEASE UNDER SECTION
12.1, OR A PERSON THAT IS A TRANSFEREE THAT HAS BEEN APPROVED BY LANDLORD
UNDER SECTIONS 12.1 AND 12.2 HEREOF (A "Permitted Transferee"). THE PARTIES
HERETO AGREE THAT IF (A) TENANT ASSIGNS ANY OF ITS INTEREST IN THIS LEASE
TO ANY PERSON OTHER THAN (I) AN AFFILIATED COMPANY PURSUANT TO SECTION
12.1, (II) A PERMITTED TRANSFEREE, OR (B) TENANT SUBLEASES THE PREMISES (OR
ANY PORTION THEREOF) TO ANY PERSON OTHER THAN AN AFFILIATED COMPANY
PURSUANT TO SECTION 12.1 HEREOF OR A PERMITTED TRANSFEREE (BUT ONLY IF THE
AREAS SUBLEASED TO ALL SUCH PERMITTED TRANSFEREES DO NOT EXCEED 25% OF THE
RENTABLE AREA OF THE PREMISES AT ANY TIME), THEN THE EXTENSION OPTIONS
SHALL TERMINATE IMMEDIATELY WITHOUT THE NEED FOR ANY ACT OR NOTICE BY
EITHER PARTY TO BE EFFECTIVE;
17.1.2 MANNER OF NOTICE. TENANT SHALL HAVE DELIVERED TO LANDLORD WRITTEN NOTICE (THE "Extension Notice") OF THE EXERCISE OF THE FIRST EXTENSION OPTION NOT LATER THAN TWO HUNDRED SEVENTY (270) DAYS PRIOR TO THE EXPIRATION OF THE CURRENT TERM OF THIS LEASE, AND TENANT SHALL HAVE DELIVERED TO LANDLORD ITS EXTENSION NOTICE WITH RESPECT TO THE SECOND EXTENSION OPTION NOT LATER THAN TWO HUNDRED SEVENTY (270) DAYS PRIOR TO THE EXPIRATION OF THE FIRST EXTENSION PERIOD; PROVIDED, HOWEVER, IF THE PREMISES LEASED BY TENANT AT THE PROPERTY EXCEED 24,000 RENTABLE SQUARE FEET, THEN THE EXTENSION NOTICES MUST BE DELIVERED NOT LATER THAN THREE HUNDRED SIXTY (360) DAYS PRIOR TO THE DATES STATED ABOVE. IF AN EXTENSION NOTICE IS NOT SO DELIVERED, TENANT'S EXTENSION OPTION SHALL AUTOMATICALLY EXPIRE;
17.1.3 EFFECT OF DEFAULT. TENANT'S RIGHT TO EXERCISE EACH EXTENSION OPTION SHALL BE SUSPENDED AT THE ELECTION OF LANDLORD DURING ANY PERIOD IN WHICH AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, BUT THE PERIOD OF TIME WITHIN WHICH THE EXTENSION OPTION MAY BE EXERCISED SHALL NOT BE EXTENDED. NOTWITHSTANDING TENANT'S DUE AND TIMELY EXERCISE OF AN EXTENSION OPTION, IF, AFTER SUCH EXERCISE AND PRIOR TO THE EFFECTIVE DATE OF THE EXTENSION OPTION AN EVENT OF DEFAULT OCCURS UNDER THIS LEASE THAT IS NOT CURED AFTER REQUIRED NOTICE AND WITHIN THE APPLICABLE GRACE PERIOD, IF ANY, LANDLORD SHALL HAVE THE RIGHT TO CANCEL TENANT'S EXERCISE OF THE EXTENSION OPTION BY DELIVERY OF WRITTEN NOTICE TO TENANT;
17.1.4 NEW RENT. THE ANNUAL BASE RENT FOR EXTENSION PERIODS SHALL BE AS FOLLOWS: (A) $290,400.00 (ON A TRIPLE NET BASIS) DURING EACH LEASE YEAR OF THE FIRST EXTENSION PERIOD PAYABLE IN MONTHLY INSTALLMENTS OF $24,200.00; AND (B) $319,440.00 (ON A TRIPLE NET BASIS) DURING EACH LEASE YEAR OF THE SECOND EXTENSION PERIOD PAYABLE IN MONTHLY INSTALLMENTS OF $26,620.00. DURING THE EXTENSION PERIODS, THE ADDITIONAL RENT SHALL CONTINUE TO BE PAYABLE AS PROVIDED IN THE LEASE AND ALL OF THE TERMS, CONDITIONS AND COVENANTS OF THIS LEASE SHALL APPLY; AND
17.1.5 FINANCIAL CONDITION. AT THE TIME TENANT EXERCISES AN EXTENSION OPTION, TENANT, SHALL HAVE A TANGIBLE NET WORTH AS DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (BASED UPON THE MOST CURRENT, DETAILED AUDITED FINANCIAL STATEMENTS PROVIDED TO LANDLORD) WHICH IS NOT LESS THAN TENANT'S TANGIBLE NET WORTH (AS DETERMINED IN ACCORDANCE WITH GAAP) AS OF DECEMBER 31, 2006; AND, IN THE EVENT THAT TENANT HAS LEASED ANY FIRST OFFER SPACE OR OTHER SPACE AT THE PROPERTY, THEN TENANT'S TANGIBLE NET WORTH (AS DETERMINED IN ACCORDANCE WITH GAAP) SHALL ALSO NOT BE LESS THAN TENANT'S TANGIBLE NET WORTH (AS DETERMINED IN ACCORDANCE WITH GAAP) AS OF THE END OF THE FISCAL QUARTER OF TENANT THAT ENDED IMMEDIATELY PRECEDING THE DATE OF TENANT'S LEASING OF SUCH ADDITIONAL SPACE.
17.2 Amendment. WITHIN FIFTEEN (15) DAYS FOLLOWING THE EXERCISE OF AN EXTENSION OPTION WITH RESPECT TO THE SUBJECT EXTENSION PERIOD, LANDLORD AND TENANT SHALL EXECUTE AN AMENDMENT TO THIS LEASE CONFIRMING THE EXTENSION PERIOD, THE APPLICABLE ANNUAL BASE RENT, ADDITIONAL RENT, THE MONTHLY RENTALS AND ANY RELATED TERMS AND CONDITIONS.
ARTICLE 18 RIGHT OF FIRST OFFER
18.1 Conditions Precedent. TENANT SHALL HAVE THE RIGHT (THE "First Offer
Option") TO LEASE, ON A ONE-TIME BASIS, ONLY ALL OF THE SPACE IN ANY ADDITIONAL
BUILDING OR "Additional Space" (AS DEFINED IN SECTION 19.2.1 HEREOF) CONSTRUCTED
BY LANDLORD ON THE PROPERTY (THE "First Offer Space") WHICH BECOMES AVAILABLE
FOR LEASE AND WHICH LANDLORD INTENDS IN GOOD FAITH TO OFFER TO THIRD PARTIES,
SUBJECT TO THE TERMS AND CONDITIONS OF THIS ARTICLE 18. THE TENANT'S RIGHTS
UNDER THIS ARTICLE 18 WITH RESPECT TO THE TENANT'S LEASING OF ANY FIRST OFFER
SPACE, ARE SUBJECT TO EACH AND ALL OF THE FOLLOWING CONDITIONS:
18.1.1 No Assignment. This First Offer Option shall not be exercised
by, or assigned or otherwise transferred to, to any person or entity,
voluntarily or involuntarily, except the Tenant named herein, an Affiliated
Company which becomes the assignee of this Lease under Section 12.1, or a
Permitted Transferee. Tenant shall only be permitted to lease the First
Offer Space for its own use and occupancy. The parties hereto agree that if
(a) Tenant assigns any of its interest in this Lease or First Offer Option
to any person other than an Affiliated Company pursuant to Section 12.1 or
any person that is a Permitted Transferee, or (b) Tenant subleases the
Premises (or any portion thereof) except to an Affiliated Company, then,
this First Offer Option shall terminate immediately without the need for
any act or notice by either party to be effective;
18.1.2 Effect of Default. At the time the Landlord is required to provide Tenant with a "FIRST OFFER NOTICE" (defined in Section 18.2) and at the time the Tenant is required to exercise its "FIRST OFFER OPTION" (defined in Section 18.2), no Event of Default shall have occurred and be continuing;
18.1.3 Financial Condition. At the time the Landlord is required to provide Tenant with a First Offer Notice and at the time the Tenant is required to exercise its First Offer Option, the tangible net worth (as determined in accordance with GAAP) of Tenant, based upon current, detailed audited financial statements provided to Landlord shall be not less than Tenant's tangible net worth as of December 31, 2006. Landlord may require the delivery of an additional security deposit in connection with such leasing;
18.1.4 Lease Extension. Tenant shall be required to extend the Term of
this Lease for the number of months necessary to make the Term of this
Lease and the term of the lease of the "FIRST OFFER SPACE" (defined below)
co-terminus at an Annual Base Rent at the then prevailing fair market rent
reasonably determined by Landlord, and subject to determination under the
procedure described in Section 19.2.3.1 below if Tenant disputes Landlord's
statement of the prevailing fair market rent. The requirements concerning
the term of the lease of the First Offer Space are set forth in Subsection
18.2.2. By Tenant's exercise of its First Offer Option, Tenant shall be
deemed to so have extended the Term and shall execute a lease amendment in
form and
substance satisfactory to Landlord confirming such extension simultaneously with the lease of the First Offer Space.
18.2 RIGHT OF FIRST OFFER.
18.2.1 First Offer Notice. When Landlord determines to make the First Offer Space available for lease to third parties, Landlord shall give Tenant written notice (the "FIRST OFFER NOTICE") of such availability and the date that such First Offer Space is estimated to be available for occupancy and such other information as is required by Subsection 18.2.2 hereof.
18.2.2 Leasing Terms. The First Offer Notice shall identify the
available space and state the estimated date of availability and the basic
economic terms, including Landlord's determination of the annual base rent
(which shall be the prevailing fair market rental rate), security deposit,
additional rent, the lease term (which shall be for a minimum term of ten
(10) years) and the tenant improvement allowance, if any (collectively, the
"ECONOMIC TERMS") upon which Landlord is willing to lease the First Offer
Space to Tenant or to a third party. Landlord shall not be obligated to
undertake any tenant improvements with respect to the First Offer Space,
unless expressly stated in the First Offer Notice.
18.2.3 Manner of Exercise. Tenant shall exercise its First Offer Option by delivering written notice (which contains the written consent to such leasing of any guarantor of this Lease) to Landlord within ten (10) days immediately following Landlord's delivery of the First Offer Notice that it unconditionally accepts the terms in the First Offer Notice (the "TENANT'S EXERCISE NOTICE"). Within fifteen (15) days immediately following delivery of Tenant's Exercise Notice in accordance with this Section 18.2 Tenant shall enter into a new lease or, at Landlord's option, lease amendment with Landlord for such First Offer Space. The parties agree that the new lease or lease amendment shall be prepared in substantially the same form (as to non-economic terms) as this Lease except to the extent that the terms of the First Offer Notice would necessitate changes.
18.2.4 Effect of Non-Exercise. In the event that Tenant fails to exercise the First Offer Option in accordance with the terms and conditions hereof, the First Offer Option (and all of Tenant's rights under this Article 18) shall terminate and be of no further force or effect; and this Lease as it pertains to the Premises shall remain in full force and effect.
ARTICLE 19 RIGHT TO EXPAND
19.1 CONDITIONS PRECEDENT. Tenant shall have the right (the "BUILDING EXPANSION OPTION") to request Landlord to construct an addition to the Building or to construct an additional building (such additional improvements, the "EXPANSION") on the Land (the "EXPANSION LOCATION"), subject to the terms and conditions of this Article 19. Exhibit E shows the general location for the future addition to the Building if Tenant elects such an Expansion pursuant hereto (but Exhibit E does not purport to show the exact dimensions of the Expansion). Tenant's rights under this Article 19 with respect to the Building Expansion Option are subject to each and all of the following conditions:
19.1.1 No Prior Exercise by Landlord. The Building Expansion Option
may not be exercised if Landlord has issued its Notice of Intent to Build.
If Landlord issues a Notice of Intent to Build and then Landlord fails to
commence construction pursuant to such Notice of Intent to Build within one
(1) year of the date of such Notice of Intent to Build, then Tenant shall
again have the right to exercise the Building Expansion Option pursuant to
this Article 19. Following Landlord's delivery of a Notice of Intent to
Build, Landlord agrees that it will reasonably promptly begin and
diligently pursue the planning
and design phase of the pre-construction process to the extent practicable under the circumstances.
19.1.2 No Assignment. The Building Expansion Option shall not be exercised by, or assigned or otherwise transferred to, to any person or entity, voluntarily or involuntarily, except Tenant as named herein or an Affiliated Company which becomes the assignee of this Lease under Subsection 12.1.2. Tenant or such Affiliated Company shall only be permitted to exercise the Building Expansion Option for its own use and occupancy. The parties hereto agree that if Tenant assigns any of its interest in this Lease or subleases more than twenty-five percent (25%) of the Premises, except to an Affiliated Company, the Building Expansion Option shall terminate immediately without the need for any act or notice by either party to be effective.
19.1.3 Effect of Default. At the time Tenant provides Landlord with the "Building Expansion Notice" (defined in Section 19.2), no Event of Default shall have occurred and be continuing.
19.1.4 Financial Condition. At the time Tenant provides Landlord with the Building Expansion Notice, Tenant shall have (a) an unrestricted and unencumbered balance of at least $1,201,082 with a U.S. banking institution in CCE, and (b) net current assets (determined in accordance with GAAP) of not less than $8,186,180, each as evidenced by financial statements certified by Tenant's chief financial officer.
19.1.5 Lease Extension. Tenant shall be required to extend the Term of
this Lease such that the Term ends on the tenth anniversary of the
"Expansion Premises Commencement Date" (defined in Section 19.6.3), subject
only to (a) Tenant's right to exercise its election not to proceed pursuant
to Section 19.2.4 or Section 19.3, and (b) the delivery of the "Expansion
Premises" (defined in Section 19.2.1) in accordance with Section_19.6.3.
The Annual Base Rent during such period for that portion of the Premises
OTHER THAN the Expansion Premises shall be as set forth in Section 17.1.4
(or, in the event Tenant exercises its Expansion Option during an Extension
Period, then to the extent such Annual Base Rent is not addressed by said
Section 17.1.4, the Annual Base Rent shall be at the applicable prevailing
market rent reasonably determined by Landlord and subject to determination
under the procedure described in Section 19.2.3.1 below if Tenant disputes
Landlord's statement of the prevailing fair market rent), and the Annual
Base Rent for the Expansion Premises during such period shall be the
"Expansion Premises Rent" (defined in Section 19.2.3). Such extension shall
be included as part of the "Expansion Premises Lease Amendment" (defined in
Section 19.5).
19.2 BUILDING EXPANSION OPTION.
19.2.1 Building Expansion Notice. Subject to the conditions set forth in Section 19.1, at any time during the Term, Tenant may give Landlord written notice (the "BUILDING EXPANSION NOTICE") that Tenant desires Landlord to construct the Expansion. Tenant's Building Expansion Notice shall specify the number of rentable square feet Tenant desires in the Expansion, which shall be no less 30,000 rentable square feet and no more than the lesser of (a) 40,000 rentable square feet, or (b) the maximum number of square feet permitted under applicable law for a single story building. Tenant shall be required to lease the number of square feet specified in Tenant's Building Expansion Notice (the "EXPANSION PREMISES"). Landlord shall have the right, by notice to Tenant given no later than fifteen (15) days after Landlord's receipt of Tenant's Building Expansion Notice, to increase the number of rentable square feet in the Expansion beyond the amount specified by Tenant in Tenant's Building Expansion Notice ("ADDITIONAL SPACE") and in such event, (x) Tenant shall have the right of first offer on any Additional Space in accordance with the procedure set forth in Article 18 (and any space so leased by Tenant pursuant to such right of first offer shall be included in the
Expansion Premises), and (y) Landlord shall be responsible for all costs related to the Additional Space, including without limitation hard costs, soft costs and any other development costs related to such Additional Space, as reasonably agreed between Landlord and Tenant. The Expansion and all related site work and other work to be performed in connection with the Expansion are collectively referred to as the "PROJECT".
19.2.2 Design Process. Landlord and Tenant will diligently work in good faith to plan and design the Project, agree upon a construction schedule for the Project, and develop a construction and development budget for the Project, giving due consideration to such factors as the projects' economic feasibility and financeability. It is understood and agreed that Landlord shall be required to construct only the base building components of the Project (the "LANDLORD'S EXPANSION WORK"), which shall be designed to allow for future multi-tenant standard market flex building occupancy, and otherwise similar in design and quality as the base building components of the Building and the buildings occupied by Tenant located at 32 and 34 East Industrial Road, Branford, Connecticut (which base building components are generally described in Exhibit G attached hereto), with any base building component upgrades which are due to change of laws at the time that the Expansion Notice is given (as the same may be amended through the date that the building permits for such work are issued).
Within twenty-one (21) days of Landlord's receipt of the Building Expansion Notice, Landlord and Tenant shall meet to review the proposed Project (the "INITIAL CONSTRUCTION MEETING"). No later than fifteen (15) days following the Initial Construction Meeting Landlord shall retain, at its expense (but subject to reimbursement as a Project expense), an architect for the Project (the "PROJECT ARCHITECT", and together with the other professionals retained by Landlord for the planning and design of the Project, including related site work, the "DESIGN PROFESSIONALS"). Promptly following the Initial Construction Meeting, Landlord shall cause the Project Architect to prepare, at its expense (subject to reimbursement as a Project expense), schematic plans and specifications for the Project (the "SCHEMATIC PLANS"), which Landlord shall submit to Tenant for Tenant's review and approval, which approval shall not be unreasonably withheld, conditioned or delayed. Tenant shall provide the Design Professionals with any information necessary for the Design Professionals to prepare the Schematic Plans. Tenant shall review and approve, or disapprove by notice in sufficient detail for Landlord to be able to reply, within ten (10) days following the submission of the Schematic Plans. If Tenant disapproves of the Schematic Plans, Landlord shall have an additional ten (10) days to revise and resubmit such Schematic Plans for Tenant's approval. Landlord shall, within twenty (20) business days after approval of the Schematic Plans, provide Tenant with (a) an estimated construction and development budget for the Project, (b) an estimated construction schedule for the Project, and (c) an estimate of the Expansion Premises Rent.
Promptly following Tenant's approval of the Schematic Plans, Landlord
and Tenant shall diligently work in good faith with the Project Architect
and other Design Professionals to prepare, at Landlord's expense (subject
to reimbursement as a Project expense), complete, coordinated construction
drawings and specifications for the Project reasonably consistent with the
Schematic Plans as approved by Tenant (the "CONSTRUCTION DOCUMENTS"), and
within thirty-five (35) business days after agreed upon Construction
Documents, Landlord shall provide Tenant with (x) a construction and
development budget for the Project (the "CONSTRUCTION BUDGET"), (y) an
estimated construction schedule for the Project, and (z) the Expansion
Premises Rent, including Landlord's determination of "Market Rent" (defined
in Section 19.2.3) and the "Expansion Premises Minimum Rent" (defined in
Section 19.2.3). The Construction Documents shall clearly indicate the
Landlord's Expansion Work and the "Tenant Work" (as defined in Section
19.6.1).
If either Landlord or Tenant shall fail to act in a timely fashion as required hereunder, then such failure shall constitute a "Landlord Delay" or "Tenant Delay", as applicable (as such terms are defined in Section 19.6.5). Tenant shall be responsible for the fees and expenses of any professionals retained by Tenant to assist Tenant in the design, development and construction of the Expansion.
19.2.3 Expansion Premises Rent. The annual base rent for the lease of
the Expansion Premises (the "EXPANSION PREMISES RENT") shall be determined
as follows. For the first five (5) years of the term, the Expansion
Premises Rent shall be the greater of (a) the prevailing fair market rental
rate for the Expansion Premises (the "MARKET RENT") (determined in
accordance with Section 19.2.3.1), or (b) "Expansion Premises Minimum Rent"
(determined in accordance with Section 19.2.3.2), and in either event
increased by twelve and one-half percent (12.5%) for every additional five
(5) years of the Term thereafter.
19.2.3.1 Determination of Market Rent. In the event that Tenant disputes the Market Rent for the Expansion Premises set by Landlord, Tenant may, within ten (10) days of its receipt of notice from Landlord establishing such Market Rent for the Expansion Premises (the "TENANT MARKET RENT RESPONSE PERIOD"), give notice to Landlord of such dispute and thereupon the matter shall be determined by appraisal as set forth below and Landlord and Tenant shall be bound by the results of the appraisal.
(a) Selection of Appraisers. Within ten (10) days following the end of the Tenant Market Rent Response Period, each of Tenant and Landlord shall choose a real estate appraiser who is a member of the American Institute of Appraisers and has at least five (5) years' full-time commercial appraisal experience in the New Haven County Shoreline market and shall notify the other party in writing of its selection. If a party does not appoint an appraiser within such ten (10) day period, the single appraiser appointed shall be the sole appraiser and shall establish the Market Rent for the Expansion Premises;
(b) Selection of Third Appraiser. If the two (2) appraisers are appointed by the parties as stated above, they shall meet within ten (10) days following their appointment in accordance with Section 19.2.3.1(a) above, and the appraisers selected shall select a third appraiser meeting the qualifications as set forth in Section 19.2.3.1(a) above; if the two (2) appraisers fail to select the third appraiser within such time period, either Landlord or Tenant, by giving ten (10) days' notice to the other party, can apply to the then president of the county real estate board of New Haven County, or to the presiding judge of the Superior Court of that county, for the selection of a third appraiser who meets the qualifications stated in Section 19.2.3.1(a) above. Each of the parties shall bear the cost of the appraiser selected by it and one half (1/2) of the cost of appointing the third appraiser and of paying the third appraiser's fee. The third appraiser, however selected, shall be a person who has not previously acted in any capacity for either party;
(c) Decision by Appraisers. Within twenty-one (21) days after their appointment, the appraisers shall determine the Market Rent for the Expansion Premises, and shall notify Tenant and Landlord of such determination within three (3) days thereafter, which determination shall be final and binding upon Tenant and Landlord. If the appraisers are unable to agree upon the Market Rent, the Market Rent will be deemed to be the average of the Market Rents proposed by the appraisers,
except that (i) if the lowest proposed fair market rent is less than ninety percent (90%) of the second to lowest proposed Market Rent, the lowest proposed Market Rent will automatically be deemed to be ninety percent (90%) of the second to lowest proposed Market Rent and (ii) if the highest proposed Market Rent is greater than one hundred ten percent (110%) of the second to highest proposed Market Rent, the highest proposed Market Rent will automatically be deemed to be one hundred ten percent (110%) of the second to highest proposed Market Rent;
(d) Guidelines for Appraisal. For the purpose of determining Market Rent, the parties shall use as a guideline the then market rent for similar available space in buildings of similar age and class as the Building in the same geographic area, the New Haven County Shoreline market.
19.2.3.2 Expansion Premises Base Minimum Rent. The "EXPANSION PREMISES MINIMUM BASE RENT" shall be annual base rent that provides an unleveraged return on "Actual Costs" (as defined below) of the greater of (a) 250 basis points over the rate on ten (10) year U.S. treasury notes last sold on the date immediately preceding Landlord's receipt of the Notice to Proceed, or (b) eight percent (8%). The "ACTUAL COSTS" shall be the actual aggregate hard cost of construction of the Project, together with an imputed cost of the underlying land (at market value), a development fee equal to three percent (3%) of the total development costs, a contingency equal to five percent (5%) of the total development costs less land cost, all costs and fees related to the construction financing (including, without limitation, construction period interest), and all other soft costs related to the Project, adjusted to take into account any portion of the Expansion not leased to Tenant in the event Landlord elects to build the Additional Space. A sample development budget is attached hereto as Exhibit F.
The cost of the Project shall include the cost of a new top coat of asphalt to the existing paving at the Property and any related repair and curb work that is necessitated due to: (a) the occurrence of any deterioration or damage to the existing paving at the Property resulting from the effects of wear caused by construction traffic during construction of the Project; and (b) the design of the Project necessitating the replacement, reconfiguration or relocation of the existing paved driveways or parking areas, which determination shall be initially made by the civil engineer for the Project, but which determination shall be subject to confirmation by an independent, licensed civil engineer mutually agreed upon by Landlord and Tenant.
19.2.4 Tenant's Election to Not Proceed. Tenant may elect, by notice to Landlord within twenty-one (21) days of its receipt of the Construction Budget and determination of the Expansion Premises Rent, to not proceed with the Project. In such event, (a) the Expansion Option (and all of Tenant's rights under this Article 19) shall terminate and be of no further force or effect, (b) the balance of this Lease shall remain in full force and effect, and (c) Tenant shall reimburse Landlord for Landlord's reasonable out-of-pocket expenses incurred in connection with the Project.
19.3 PERMITS AND APPROVALS. Landlord shall be responsible for seeking, at its expense (but subject to reimbursement as a Project expense, and subject to Landlord's contribution for its share of such costs pursuant to Section 19.2.1), any and all permits and approvals necessary for the development and construction of the Project (collectively, the "REQUIRED APPROVALS"). Landlord agrees to commence such process at a mutually agreed time, to diligently pursue the same thereafter, and to use diligent efforts to obtain the Required Approvals within two hundred seventy (270) days following the Building Expansion Notice.
Tenant agrees to reasonably cooperate with Landlord in seeking such Required Approvals. Landlord agrees to keep Tenant apprised of the status of such Required Approvals. In the event Landlord is unable to obtain the Required Approvals solely due to the Additional Space, then Landlord shall eliminate the Additional Space from the Project and seek to obtain the Required Approvals for the Project as modified. Once the Required Approvals have been obtained with all appeal periods having expired without an appeal having been filed, Landlord shall notify Tenant (the "APPROVAL NOTICE") and Tenant shall either (a) provide Landlord with a notice of Tenant's desire to proceed with the Project (the "NOTICE TO PROCEED"), or (b) elect, by notice to Landlord within twenty-one (21) days of its receipt of the Approval Notice to not proceed with the Project, and in such event (i) the Expansion Option (and all of Tenant's rights under this Article 19) shall terminate and be of no further force or effect, (ii) the balance of this Lease shall remain in full force and effect, (iii) Tenant shall reimburse Landlord for Landlord's reasonable out-of-pocket expenses incurred in connection with the Project, and (iv) Landlord may proceed with the Project without any further involvement of Tenant.
19.4 TERMINATION OF EXPANSION OPTION. The Expansion Option (and all of Tenant's rights under this Article 19) shall terminate and be of no further force or effect in the event that (a) Tenant fails to exercise the Expansion Option in accordance with the terms and conditions hereof, (b) Landlord and Tenant are unable to agree upon the Construction Budget and the Construction Documents in accordance with Section 19.2.2 on or before the date that is one hundred eighty (180) days after Landlord's receipt of the Building Expansion Notice, (c) Landlord is unable to obtain the Required Approvals and issue the Approval Notice within two hundred seventy (270) days of Landlord's receipt of the Building Expansion Notice, or (d) Tenant fails to issue the Notice to Proceed within twenty-one (21) days of its receipt of the Approval Notice. In such event, (x) the Expansion Option (and all of Tenant's rights under this Article 19) shall terminate and be of no further force or effect, (y) the balance of this Lease shall remain in full force and effect under its original term, and (z) Tenant shall reimburse Landlord for Landlord's reasonable out-of-pocket expenses incurred in connection with the Project.
19.5 EXPANSION PREMISES LEASE AMENDMENT. Within twenty-one (21) days of Landlord's receipt of the Notice to Proceed, Landlord and Tenant shall enter into an amendment to this Lease adding the Expansion Premises to the Premises, extending the Term of this Lease and specifying the Annual Base Rent as contemplated by Section 19.1.4 above. In addition to Landlord's Replacement Obligations under Section 8.1, with respect to the Expansion Premises only, Landlord Replacement Obligations shall also include the structure and the exterior walls of the Expansion.
19.6 CONSTRUCTION OF EXPANSION.
19.6.1 Promptly following Landlord's approval of the Construction Documents, Landlord shall (a) proceed with selection of a general contractor for the Project, and (b) seek financing for the portion of the Project constituting Landlord's Expansion Work on terms acceptable to Landlord. Tenant agrees to reasonably cooperate with Landlord in connection with the foregoing. Landlord agrees to use commercially reasonable efforts to obtain competitive pricing for the construction of Landlord's Expansion Work and to use commercially reasonable efforts to obtain competitive terms for the financing of the same. Landlord agrees to obtain, at its expense (but subject to reimbursement as a Project expense), with respect to Landlord's Expansion Work a performance bond, naming Tenant as a dual obligee. Landlord also agrees that it shall cause its principals to issue a completion guaranty with respect to Landlord's Expansion Work in substantially the same form as is given by such parties to Landlord's construction lender. Tenant agrees that to the extent required by Landlord's construction lender, Tenant's rights under said performance bond and completion guaranty shall be subordinated to the rights of such construction lender. Upon Landlord's receipt of Tenant's Notice to Proceed, Landlord shall, at Landlord's expense (as a Project expense) diligently pursue the construction of the Landlord's Expansion Work in accordance with the approved and permitted
Construction Documents and the Required Approvals. Landlord will exercise all commercially reasonable efforts to "SUBSTANTIALLY COMPLETE" (as hereinafter defined) the Landlord's Expansion Work within fifteen (15) months its receipt of Tenant's Notice to Proceed. Landlord shall have no obligation for any work beyond the Landlord's Expansion Work, it being expressly agreed that Tenant shall be responsible, at its sole cost and expense, for any work set forth on the Construction Documents and/or required by the Required Approvals beyond the Landlord's Expansion Work (any and all such work beyond the Landlord's Expansion Work being referred to as "TENANT WORK"). In the event Landlord is unable to Substantially Complete the Landlord's Expansion Work within fifteen (15) months of its receipt of Tenant's Notice to Proceed, as such time period may be extended due to Tenant Delay and/or Force Majeure, Tenant shall have the right to notify Landlord, with a copy to Landlord's Mortgagee, either of (i)Tenant's intent to terminate its lease of the Expansion Premises ("Tenant's Notice of Intent to Terminate"), or (ii) Tenant's intent to waive a claim of default and complete Landlord's Expansion Work by delivery of a Tenant's Notice of Intent to Exercise Self-Help. If Tenant issues Tenant's Notice of Intent to Terminate and Landlord does not Substantially Complete the Landlord's Expansion Work within sixty (60) days following the date of Tenant's Notice of Intent to Terminate, as such time period may be extended due to Tenant Delay and/or Force Majeure, then Tenant shall have the right to terminate its lease of the Expansion Premises by notice to Landlord and Landlord's Mortgagee ("TENANT'S TERMINATION NOTICE") effective as of the date set forth in Tenant's Termination Notice, which shall be no less than thirty (30) days after the date of Tenant's Termination Notice, and unless Landlord notifies Tenant within ten (10) business days following Tenant's Termination Notice by delivery of a Landlord's Dispute Notice that it disputes Tenant's Termination Notice, then as of the effective date set forth in Tenant's Termination Notice, Tenant's obligation to lease the Expansion Premises shall terminate, and the parties shall have no further rights under this Building Expansion Option except to the extent such rights expressly survive any termination, and the same shall be Tenant's sole and exclusive remedy for Landlord's failure to substantially complete the Landlord's Expansion Work. Tenant's termination of its lease of the Expansion Premises shall not affect its rights and obligations with respect to the Premises leased under this Lease. In the event that Landlord issues Landlord's Dispute Notice, the dispute shall be submitted to arbitration in accordance with Section 13.9 and Tenant's Termination Notice shall only be effective upon a determination in such proceeding that Landlord did not Substantially Complete the Landlord's Expansion Work within the required time frame.
If Tenant issues Tenant's Notice of Intent to Exercise Self Help and Landlord does not Substantially Complete the Landlord's Expansion Work within sixty (60) days following the date of Tenant's Notice of Intent to Exercise Self Help, as such time period may be extended due to Tenant Delay and/or Force Majeure, then, Tenant shall have the right to complete the construction of the Landlord's Expansion Work, subject to terms, conditions and covenants applicable to Tenant's construction self-help rights contained in Section 13.10 hereof, including without limitation, Landlord's right to deliver a Landlord's Dispute Notice and submit the dispute to arbitration pursuant to Section 13.9 hereof, and the same shall be Tenant's sole and exclusive remedy for Landlord's failure to substantially complete the Landlord's Expansion Work.
19.6.2 Tenant may, from time to time, by written order to Landlord on a form reasonably specified by Landlord, request a change in the Landlord's Expansion Work shown on the Construction Documents ("CHANGE ORDER"). The Construction Documents shall not be modified in any material respect except with Landlord's prior written approval; and all modifications to the Construction Documents, whether material or not, shall be made only by Change Order submitted in timely fashion to Landlord and approved by Landlord. Any Tenant requested Change Order shall be at Tenant's sole cost and expense and if it impacts the construction schedule, shall constitute a Tenant Delay. Landlord shall construct the Landlord's Expansion Work in a good and workmanlike
manner, using new materials of first quality, and shall comply with the Required Approvals and all applicable laws, ordinances, orders and regulations of governmental authorities applicable to the Landlord's Expansion Work. With respect to Change Orders submitted after Landlord is initially authorized (or deemed authorized) to proceed with the Landlord's Expansion Work, Landlord shall be deemed authorized to proceed with such Change Order immediately upon submission thereof unless Tenant specifically requests in writing a price estimate for such Change Order, in which event Landlord shall be deemed authorized to proceed with such Change Order on the third day after submission of the price estimate to Tenant if the Change Order has not then been withdrawn. No work shall be performed except in accordance with the Construction Documents and any Change Orders approved by Landlord. Landlord has no obligation to approve any Change Order or any work not shown on the Construction Documents or reasonably inferable therefrom if, in Landlord's reasonable judgment, such work (a) would materially delay completion of the Landlord's Expansion Work; (b) would materially increase the cost of operating the Building or increase the cost of performing any other work in the Building, (c) are incompatible with the design, quality, equipment or systems of the Building, (d) would require unusual expense to readapt the Expansion Premises to general purpose office/flex use, or (e) otherwise do not comply with the provisions of this Lease. By its submission of any Change Orders, Tenant will be deemed to have approved of, and shall be legally responsible for, such Change Orders. Notwithstanding the foregoing or anything herein to the contrary, if any Change Order reasonably specifies a long lead item that Landlord reasonably determines could not be delivered and installed in a manner consistent with the schedule set forth herein for completion of the Landlord's Expansion Work, then such long lead item may be completed by Landlord following the Commencement Date (if permitted pursuant to applicable law) without constituting a Landlord or Tenant Delay hereunder.
19.6.3 Landlord shall give Tenant notice ("LANDLORD'S SUBSTANTIAL
COMPLETION NOTICE") of the date (the "EXPANSION PREMISES COMPLETION DATE")
on which Landlord's Expansion Work is "Substantially Complete" (as
hereinafter defined). "SUBSTANTIALLY COMPLETE" shall mean that such portion
of Landlord's Expansion Work is (i) substantially completed, as determined
by the certification of the General Contractor and Project Architect, in
accordance with the applicable Construction Documents and applicable laws
as is necessary for Tenant to commence the Tenant Work and for Tenant to
have reasonable access and egress to the Expansion Premises, excepting only
(a) punch list type items and other uncompleted elements of construction,
decoration, painting, millwork or other work and mechanical adjustment that
will not interfere materially with commencement the Tenant Work and
Tenant's reasonable access and egress to the Expansion Premises, and (b)
matters that cannot be completed owing to their seasonal nature; and (ii)
the Building systems serving the Expansion Premises are in good working
order. In the event of Tenant disputes that Landlord's Expansion Work is
Substantially Complete, Tenant shall notify Landlord within five (5) days
of Landlord's Substantial Completion Notice and, provided that Tenant is
then paying rent (including, without limitation, for the Expansion
Premises) and otherwise is not in default under this Lease, such matter
shall be determined in accordance with the procedure set forth in Section
13.9. Notwithstanding anything herein to the contrary, in the event Tenant
occupies the Expansion Premises, the Expansion Premises shall be deemed
"Substantially Complete." On a date reasonably specified by Landlord,
Landlord and Tenant shall inspect the Expansion Premises for the purpose of
preparing a list of the punchlist type items then remaining to be completed
as part of the Landlord's Expansion Work (the "PUNCHLIST"). Landlord shall
submit the Punchlist to Tenant, and Tenant shall sign and return the
Punchlist to Landlord within five (5) business days of receipt (or, if
earlier, by the day before Tenant takes occupancy of the Expansion
Premises), noting any items which Tenant reasonably believes should be
added thereto. Items shall not be added to the Punchlist by Tenant after it
is delivered to Landlord. If the Punchlist is not timely delivered by
Tenant, then the Landlord's Expansion Work shall be deemed final and
complete, and Landlord shall have no further obligation to cause any other Landlord's Expansion Work to be completed. With respect to items on the Punchlist not in dispute, Landlord shall cause such items to be completed in a diligent manner, but in a manner which will seek to minimize interruption of Tenant's use and occupancy of the Expansion Premises and completion of the Tenant Work. With respect to any disputed Punchlist items, Landlord shall cause such items to be completed in like manner, but Landlord may nevertheless reserve Landlord's rights to require Tenant to pay the costs therefore.
19.6.4 If and as long as Tenant does not interfere in any way with the
construction process (by causing labor disharmony, scheduling or
coordination difficulties, etc.), Tenant may, with prior approval of
Landlord (which shall not be unreasonably be withheld, conditioned or
delayed), and at Tenant's sole risk and expense, enter the Expansion
Premises prior to the Expansion Premises Commencement Date for the purpose
of performing the Tenant Work, and in such event, Tenant shall comply with
and perform, and shall cause its employees, agents, contractors,
subcontractors, material suppliers and laborers to comply with and perform,
all Tenant's obligations under this Lease except the obligations to pay
Annual Base Rent and other obligations the performance of which would be
clearly incompatible with the installation of the Tenant Work pursuant
hereto. Any independent contractor of Tenant (or any employee or agent of
Tenant) performing any work in the Expansion Premises prior to the
Expansion Premises Commencement Date shall be subject to all of the terms,
conditions and requirements contained in this Lease. Neither Tenant nor any
Tenant contractor shall interfere in any way with construction of the
Landlord's Expansion Work, and each shall do all things reasonably
requested by Landlord to expedite construction of the Landlord's Expansion
Work. Without limitation, Tenant shall require each Tenant contractor to
adjust and coordinate any work or installation in, or otherwise with
respect to, the Expansion Premises to meet the schedule or requirements of
other work being performed by or for Landlord throughout the Building which
shall in all cases have precedence. If Tenant or any Tenant contractor
fails so to adjust to the schedule or requirements of Landlord, then
Landlord may immediately by notice to Tenant terminate permission
previously granted to Tenant to enter the Expansion prior to the Expansion
Premises Commencement Date. Neither Tenant, nor any Tenant contractor,
shall cause any labor disharmony, and Tenant shall be responsible for all
costs required to produce labor harmony in connection with an entry under
this Section 19.6.4. In all events, Tenant shall indemnify Landlord in the
manner provided in Section 9.4 against any claim, loss or cost arising out
of any interference with, or damage to, the Landlord's Expansion Work or
any other work in the Building, or any delay thereto, or any increase in
the cost thereof on account in whole or in part of any act, omission,
neglect or default by Tenant or any Tenant contractor. Without limiting the
generality of the foregoing, to the extent that the commencement or
performance of Landlord's Expansion Work is delayed on account in whole or
in part of any act, omission, neglect, or default by Tenant or any Tenant
contractor, then such delay shall constitute a Tenant Delay as provided in
Section 19.3.5. Any requirements of any such Tenant contractor for services
from Landlord or Landlord's contractor, such as hoisting, electrical or
mechanical needs, shall be at Tenant's sole cost and expense and shall be
arranged between such Tenant contractor and Landlord or Landlord's
contractor. Should the work of any Tenant contractor depend on the
installed field conditions of any item of the Landlord's Expansion Work,
such Tenant contractor shall ascertain such field conditions after
installation of such item of Landlord's Expansion Work. Neither Landlord
nor Landlord's contractor shall ever be required or obliged to alter the
method, time or manner for performing Landlord's Expansion Work or work
elsewhere in the Building, on account of the work of any such Tenant
contractor. Tenant shall cause each Tenant contractor performing work on or
otherwise with respect to, the Expansion Premises to clean up regularly and
remove its debris from the Expansion Premises and Building.
19.6.5 Delays.
(A) A delay in the commencement or performance of Landlord's Expansion Work as a result of any of the following is referred to herein as a "TENANT DELAY":
(i) a failure of Tenant to respond to Landlord's proper request for approval of the Schematic Plans within the time period set forth herein,
(ii) a failure timely to approve a reasonable substitute for any materials, equipment, designs, processes, or products shown on the Construction Documents which are not readily available to Landlord's contractor to acquire in a timely manner and incorporate into the Landlord's Expansion Work in the ordinary course without delay,
(iii) any Change Order causing a delay,
(iv) any failure of Tenant to act in a timely manner as required hereunder on any construction-related question or matter,
(v) any request by Tenant that Landlord delay the commencement of, or suspend the performance of, any Landlord's Expansion Work causing delay, or
(vi) any other act or omission of Tenant, any Tenant contractor, or any of their officers, employers, agents, or contractors causing a delay.
Except with respect to items (ii) and (iv) above, Tenant Delay shall not have occurred until Landlord gives Tenant notice of the existence of such Tenant Delay and such Tenant Delay continues for two (2) business days thereafter. For each day of Tenant Delay, Substantial Completion shall be deemed to have occurred earlier than the actual date thereof by the number of days of such Tenant Delay.
(b) A delay in the commencement or performance of Landlord's Expansion Work as a result of any of the following is referred to herein as a "LANDLORD DELAY":
(i) any act or omission of Landlord, any Landlord contractor, or any of their officers, employers, agents, or contractors causing a delay.
Landlord Delay shall not have occurred until Tenant gives Landlord notice of the existence of such Landlord Delay and such Landlord Delay continues for two (2) business days thereafter.
19.7 32 AND 34 EAST INDUSTRIAL ROAD LEASES. In the event that Tenant issues a Notice to Proceed and enters into an amendment to this Lease for the Expansion Premises as contemplated by Section 19.5, Tenant shall have the right, upon payment of the "Existing Leases Termination Fee" (defined below), to be relieved from its obligations under Tenant's existing leases at 32 and 34 Industrial Road, Branford, Connecticut (collectively, the "EXISTING LEASES"), effective as of the Expansion Premises Commencement Date, such right to be exercised by notice given by Tenant to Landlord concurrent with the Notice to Proceed (the "EXISTING LEASES NOTICE"). The "EXISTING LEASES TERMINATION FEE" shall be an amount equal to the sum of (a) all unamortized transactions costs incurred by the lessors under the Existing Leases, including, without limitation, all tenant improvement allowances, brokerage fees, legal fees and architectural, engineering or other professional fees (utilizing an annual interest rate of 9%), and
(b) three (3) months "Rent" (as such term is defined in the Existing Leases)
under the Existing Leases at the rate in effect at the time of the Existing
Leases Notice. Landlord agrees to provide Tenant with the amount of all such
unamortized transaction costs promptly upon Landlord's receipt of the same. Upon
Landlord's receipt of the Existing Leases Notice and the Existing Leases
Termination Fee, Landlord shall diligently pursue the necessary consents and
approvals to cause the Existing Leases to be terminated, or for the Existing
Leases to be assigned and Tenant released therefrom, and if Landlord determines
that such consents and approvals cannot reasonably be obtained, Landlord shall
assume Tenant's obligations first arising under the Existing Leases from and
after the later of (x) the date Tenant vacates the premises demised under the
Existing Leases, or (y) the Expansion Premises Commencement Date, and indemnify
Tenant from loss cost or expense in connection therewith, and Tenant shall yield
up, surrender and vacate the premises demised under the Existing Leases in
accordance with the applicable terms and conditions of the Existing Leases.
Landlord shall cause its principals to guaranty the foregoing indemnification by
Landlord. In the event the Existing Leases cannot be terminated, Tenant hereby
consents to any assignment of the Existing Leases, or either of them, whether
arranged by Landlord, the landlords under the Existing Leases, or otherwise;
Tenant further agrees that it shall not unreasonably withhold, condition or
delay its consent to any sublease of the premises demised under the Existing
Leases or any portion thereof, whether arranged by Landlord, the landlords under
the Existing Leases, or otherwise. Tenant shall fully cooperate with Landlord,
including, without limitation, executing and delivering (at no additional
expense to Tenant) any and all documentation reasonably required by Landlord, in
connection with Tenant's exercise of its rights under this Section 19.7. The
Existing Leases Termination Fee shall be adjusted to reflect the actual
effective date Tenant is relieved of its obligations under the Existing Leases
once such date is determined, and Tenant shall pay any additional amount due to
Landlord or Landlord shall credit any overpayment due to Tenant, within thirty
(30) days after such determination.
ARTICLE 20 LANDLORD LIEN WAIVER
20.1 TENANT'S PERSONAL PROPERTY. In no event shall Landlord subject Tenant's Property to any liens, rights or claims and Landlord hereby waives any right to place a lien on Tenant's Property. All Tenant's Property whether owned by or leased by Tenant from a landlord/owner (the "OWNER/SECURED PARTY") installed in the Property, regardless of the manner or mode of attachment, shall be and remain the property of Tenant or any such Owner/Secured Party and may be removed by Tenant or any such Owner/Secured Party at any time pursuant to the terms of this Lease. In no event (including a default under this Lease) shall Landlord have any liens, rights or claims in Tenant's Property, and Landlord agrees to execute and deliver to Tenant and Owner/Secured Party, within ten (10) days after request therefor, any document reasonably required by Tenant or Owner/Secured Party in order to evidence the foregoing.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease the day and year first above written.
WITNESSED BY: LANDLORD:
/s/ David B. Currie DMP NEW BRANFORD, LLC
------------------------------------
SIGNATURE OF WITNESS
PRINT NAME: David B. Currie
/s/ Barbara H. Stanley By: /s/ Jonathan G. Davis
------------------------------------ -----------------------------------
SIGNATURE OF WITNESS Name: Jonathan G. Davis
PRINT NAME: Barbara H. Stanley Title: Manager
-------------------------
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WITNESSED BY: TENANT:
/s/ Pamela P. Millman CAS MEDICAL SYSTEMS, INC.
------------------------------------
SIGNATURE OF WITNESS
PRINT NAME: Pamela P. Millman
-------------------------
By: /s/ Jeffery Alan Baird
-----------------------------------
/s/ Cathy J. Anderson Name: Jeffery Alan Baird
------------------------------------ Title: Chief Financial Officer
SIGNATURE OF WITNESS
PRINT NAME: Cathy J. Anderson
-------------------------
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COMMONWEALTH OF MASSACHUSETTS)
) ss. Boston
COUNTY OF SUFFOLK )
On this the _____ day of September, 2007, before me, the undersigned officer, personally appeared ______________________________________________, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument, and acknowledged himself/herself to be a Manager of DMP NEW BRANFORD, LLC, a Massachusetts limited liability company, and that he/she, as such Manager, being authorized so to do, executed the foregoing instrument as the free act and deed of the company for the purposes contained therein by signing the name of the company by himself/herself as such Manager.
IN WITNESS WHEREOF, I hereunto set my hand.
/s/
-----------------------------------------
Print Name:
Notary Public
[Affix Notarial Seal] My Commission Expires:
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STATE OF CONNECTICUT )
) ss. New Haven
COUNTY OF NEW HAVEN )
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On this the ____ day of September, 2007, before me, the undersigned officer, personally appeared ____________________________________________, who acknowledged himself to be the ______________ of CAS MEDICAL SYSTEMS, INC., a Delaware corporation, and that he, as such __________________________, being authorized so to do, executed the foregoing instrument as his free act and deed and the free act and deed of the corporation for the purposes contained therein by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand.
/s/
-----------------------------------------
Print Name:
Commissioner of the Superior Court/
Notary Public
[Affix Notarial Seal] My Commission Expires:
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