Exhibit 10.6

 

January 10, 2003

 

381 CONNECTICUT AVENUE CORPORATION,

 

Landlord

 

and

 

BOLT TECHNOLOGY CORPORATION

 

Tenant

 

     Premises:    4 Duke Place           Norwalk, Connecticut

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CONTENTS

 

SECTION

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   PAGE

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1.

   PREMISES AND TERM    1

2.

   USE OF PREMISES; LEGAL AND INSURANCE REQUIREMENTS    1

3.

   RENT    2

4.

   REAL ESTATE TAXES    3

5.

   ALTERATIONS, LIENS AND SIGNS.    3           5.1    Property of Landlord    3
          5.2    Tenant Alterations.    3           5.3    Removal of Tenant’s
Property.    5           5.4    Discharge of Liens.    5           5.5    Signs.
   5           5.6    Antenna.    6

6.

   REPAIRS    6

7.

   INSURANCE    7

8.

   SUBORDINATION    8

9.

   DESTRUCTION, FIRE OR OTHER CAUSES    8

10.

   EMINENT DOMAIN    9

11.

   ASSIGNMENT, MORTGAGE, ETC    10           11.1    Consent; Recapture    10  
        11.2    Affiliates    11           11.3    Profit Sharing; Continuing
Liability    12

12.

   CURING DEFAULTS    13

13.

   NO REPRESENTATIONS BY LANDLORD; INDEMNIFICATION    13

14.

   INTERRUPTION OF SERVICES; FORCE MAJEURE    14

15.

   QUIET ENJOYMENT; HOLDOVER    14

16.

   DEFAULT    14

 

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17.

     REMEDIES OF LANDLORD    15

18.

     RIGHT TO EXHIBIT PREMISES AND ACCESS TO PREMISES    16

19.

     BROKERAGE    16

20.

     LEASE STATUS AND NOTICE    17

21.

     ASSIGNS; LANDLORD’S INTEREST.    18

22.

     SECURITY DEPOSIT    19

23.

     OPTIONS TO EXTEND    19

24.

     ENVIRONMENTAL MATTERS.    20

25.

     WAIVER    22

26.

     MISCELLANEOUS    23

27.

     SURRENDER OF PREMISES    24

EXHIBITS

    

A — Description of Land

    

B — Encumbrances

    

 

 

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Agreement dated the 10th day of January, 2003 by and between 381 CONNECTICUT
AVENUE CORPORATION (“Landlord”), a Connecticut Corporation with an office at 225
Wilson Avenue, Norwalk, Connecticut; and BOLT TECHNOLOGY CORPORATION (“Tenant”),
a Connecticut corporation with an office at 4 Duke Place, Norwalk, Connecticut.

 

WITNESSETH:

 

1. PREMISES AND TERM.

 

(1) Landlord hereby leases to Tenant the land located in the City of Norwalk,
County of Fairfield and State of Connecticut, described on Exhibit A hereto (the
“Land”), and the buildings and improvements constructed on the land (the
“Building”) thereon (collectively, the “Premises”), for a term described below,
subject to earlier termination or extension, as herein provided. The Premises
are commonly known as 4 Duke Place, Norwalk, Connecticut. The Building contains
approximately 6,600 square feet and the parties agree to that square footage.

 

(2) The term of this Lease shall commence on January 10, 2003 (the “Commencement
Date”) and shall expire on the 9th day of January, 2008, or upon the expiration
of any option term as set forth herein (such date herein the “Expiration Date”).

 

2. USE OF PREMISES; LEGAL AND INSURANCE REQUIREMENTS

 

(1) Tenant shall use the Premises for an office use related to its business and
for no other purpose without the express written consent of the Landlord which
consent shall not be unreasonably withheld, to the extent permitted under
applicable law. Tenant shall not at any time use or occupy, or suffer or permit
anyone to use or occupy the Premises, or do or permit anything to be done in the
Premises, in violation of the certificate of occupancy for the Premises.

 

(2) Tenant, at its expense, shall comply with all laws, orders and regulations
of Federal, State and municipal authorities and with any direction of any public
officer or officers, pursuant to law, which shall impose any violation, order or
duty upon Landlord or Tenant with respect to the Premises or the use or
occupancy thereof, including without limitation the Americans With Disabilities
Act (as amended from time to time and as may be superseded from time to time,
the “Act”) and any Environmental Laws (collectively, the “Legal Requirements”),
except any such compliance that may be required as a result of the actions
and/or the omissions of Landlord or any prior landlord, or environmental
conditions unrelated to Tenant’s activity at or use of the Premises.

 

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(3) Tenant, at its expense, shall comply with all rules, orders, regulations and
requirements of the Board of Fire Underwriters or other similar body or
authority having jurisdiction and all insurance policies affecting the Premises
(collectively, the “Insurance Requirements”) and shall not do or permit anything
to be done, in or upon the Premises, or bring or keep anything therein, which is
prohibited by any Insurance Requirements, or which would increase the rate of
fire insurance applicable to the Premises over that in effect on the date
hereof. Tenant shall comply with the Legal Requirements and the Insurance
Requirements, whether or not such compliance shall require extraordinary or
unforeseen repairs, replacements or additions, and whether or not the Premises
currently comply with same.

 

(4) Tenant’s use of equipment in the Building shall not, without Landlord’s
prior written approval, exceed the mechanical or electrical capabilities of
equipment in the Building. Tenant shall not place a load upon any floor of the
Building exceeding the maximum permissible loads.

 

3. RENT.

 

(1) Tenant shall pay to Landlord the net annual rent (“Net Rent”) specified
below, without demand and without setoff or deductions of any kind except as
hereinafter specified, in equal monthly installments, in advance, on the 1st day
of each calendar month of the Lease term, at Landlord’s address first noted
above, or at such other place as Landlord may designate in writing from time to
time.

 

(2) The Net Rent for the term shall be as follows:

 

Five Hundred Ninety Four Thousand and 00/100 ($594,000.00) Dollars, payable in
sixty (60) equal monthly installments of Nine Thousand Nine Hundred and 00/100
($9,900.00) Dollars each. The annual Net Rent shall be One Hundred Eighteen
Thousand and 00/100 ($118,000.00) Dollars.

 

(3) The Net Rent shall be in addition to all other payments to be made by Tenant
hereunder (“Additional Rent”). Additional Rent shall be paid without setoff or
deductions of any kind, within 10 days after submission of an invoice for same,
except as hereinafter specified. Net Rent and Additional Rent shall be herein
collectively called “Rent”.

 

(4) Except as specified in this Lease, the Rent shall be absolutely net to
Landlord, and all costs, expenses and obligations of every kind and nature
relating to the Premises and the operation thereof, which may accrue or become
due subsequent to the Commencement Date shall be paid by Tenant, including
without limitation all utilities and other services consumed or otherwise
utilized by Tenant in its construction and the operation of its business at the
Premises, but excluding payments under any mortgage granted by Landlord on the
Premises from time to time. Tenant shall indemnify and hold

 

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harmless Landlord from and against the same and all costs and expenses incurred
by Landlord in connection with claims for same, including reasonable counsel
fees.

 

(5) Any Rent not paid by Tenant on or before five (5) days after the due date
thereof shall thereafter be payable on or before the 1st day of the following
month with a late charge equal to 5% of the unpaid installment, payable as
Additional Rent.

 

4. REAL ESTATE TAXES.

 

ADDITIONAL TAXES. In addition to the Rent, the Tenant agrees to pay to Landlord
throughout the term of the lease a portion of such sum as shall become due and
payable by Landlord to the City of Norwalk for increased taxes upon the Premises
and the Land on which it stands. Said sum shall become due and payable
commencing on the first (1st) day of July, 2003. Said sum shall be computed as
follows:

 

The parties agree that the base tax year shall be that year in which the taxes
are due and payable by Landlord to the City of Norwalk on the first day of July,
2002 and such tax shall be Landlord’s sole obligation. When the tax bill shall
be delivered by the City of Norwalk to Landlord for the List of October 1, 2002
the above described base tax shall be deducted and Tenant shall pay to Landlord
the difference between the tax payable in the base year and the tax bill
delivered to Landlord for the Premises for said year. Said sum shall be payable
in full by Tenant when such taxes are due to the City of Norwalk, but in no
event shall said sum be due until Landlord has delivered to Tenant a writing, by
mail or otherwise describing the computation by which Landlord arrived at the
said additional tax rental. The above procedure shall be followed for each
succeeding lease year basing the tax calculation on the bill received on the
preceeding July 1st. The payment of the additional real estate taxes shall be
deemed “Additional Rent”.

 

5. ALTERATIONS, LIENS AND SIGNS.

 

5.1 Property of Landlord. All alterations, improvements or additions made upon
the Premises by Landlord or Tenant, except furniture, portable equipment, or
movable partitions or trade fixtures installed at the expense of Tenant and
removable without substantial damage to the Premises, shall be the property of
Landlord and shall remain and be surrendered with the Premises as a part thereof
at the termination of this Lease, without compensation to Tenant, unless
Landlord shall require Tenant to remove same, in which event Tenant shall remove
same prior to the termination of this Lease.

 

5.2 Tenant Alterations. Tenant shall have the right at any time and from time to
time during the term of this Lease to make, at its sole cost and expense,
changes and alterations and or to the Premises, subject in all cases to the
following:

 

(1) No change or alteration shall be undertaken except after obtaining
Landlord’s prior written approval, which approval shall not be unreasonably
withheld.

 

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(2) No change or alteration shall be undertaken until Tenant shall have procured
and paid for, so far as the same may be required from time to time, all permits
and authorizations of all municipal departments and governmental subdivisions
having jurisdiction. Landlord shall join in the application for such permits or
authorizations whenever such action is necessary.

 

(3) Any change or alteration which affects the structure of the Building or
which costs in excess of $10,000.00 shall be conducted under the supervision of
an architect and/or engineer selected by Tenant and approved in writing by
Landlord (which approval shall not be unreasonably withheld), and no such change
or alteration shall be made except in accordance with detailed plans and
specifications and cost estimates prepared by such architect and/or engineer and
approved in writing by Landlord.

 

(4) Any change or alteration shall be made promptly (unavoidable delays
excepted) and in a good and workmanlike manner and in compliance with all
applicable permits and authorizations and building and zoning laws and with all
other Legal Requirements and Insurance Requirements.

 

(5) The cost of any such change or alteration shall be paid in cash or its
equivalent, so that the Premises shall at all times be free of liens for labor
and materials supplied or claimed to have been supplied to Tenant.

 

(6) Workers’ compensation insurance in statutory limits covering all persons
employed in connection with the work and with respect to whom death or bodily
injury claims could be asserted against Landlord, Tenant or the Premises, and
general liability insurance for the mutual benefit of Tenant and Landlord in
such limits as Landlord may reasonably require, shall be maintained by Tenant at
Tenant’s sole cost and expense at all times when any work is in process in
connection with any change or alteration. All such insurance shall be in a
company or companies of recognized responsibility, licensed to do business in
the State of Connecticut and all policies or certificates therefor issued by the
respective insurers, bearing notations evidencing the payment of premiums or
accompanied by other evidence satisfactory to Landlord of such payment, shall be
delivered to Landlord.

 

(7) Before commencement of work described in SECTION 5.2 above, Landlord may
require Tenant to furnish to Landlord a performance bond, issued by a surety
company acceptable to Landlord, or other security reasonably satisfactory to
Landlord, in an amount at least equal to the estimated cost of such change or
alteration, guaranteeing the completion thereof within a reasonable time, free
and clear of all liens, encumbrances, chattel mortgages, conditional bills of
sale and other charges, and in accordance with the plans and specifications
approved by Landlord.

 

(8) Tenant shall pay to Landlord the fees and expenses of any

 

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architect and/or engineer selected by Landlord to review the plans and
specifications and inspect the work on behalf of Landlord, provided however that
such fees and expenses shall not exceed One Thousand Five Hundred Dollars
($1,500.00) on each occasion.

 

5.3 Removal of Tenant’s Property. At or before the Expiration Date or the date
of any earlier termination of this Lease, Tenant, at its expense, shall remove
from the Premises all of Tenant’s property and shall repair any damage to the
Premises resulting from such removal. Any other items of Tenant’s property
(except money, securities and other like valuables) which shall remain in the
Premises after the Expiration Date or after an earlier termination date, may, at
the option of Landlord, be deemed to have been abandoned, and in such case
either may be retained by Landlord as its property or may be disposed of, [at
Tenant’s expense and] without accountability, in such manner as Landlord may
reasonably determine.

 

5.4 Discharge of Liens.

 

(1) Tenant, at its expense, and with diligence and dispatch, shall procure the
cancellation or discharge of all notices of violation arising from or otherwise
connected with Tenant’s work which shall be issued by any public authority
having or asserting jurisdiction. Tenant shall defend, indemnify, and save
harmless Landlord against any and all mechanics and other liens in connection
with Tenant’s work, repairs or installations, including but not limited to the
liens of any conditional sale of, or chattel mortgages upon, any materials,
fixtures, or articles so installed in and constituting part of the Premises and
against all costs, counsel fees, fines, expenses and liabilities reasonably
incurred by Landlord in connection with any such lien, conditional sale or
chattel mortgage or any action or proceeding brought thereon. Landlord does not
consent to any liability for labor or materials provided to Tenant with respect
to the Premises.

 

(2) Tenant, at its expense, shall procure the satisfaction or discharge, by
bonding or otherwise, of all such mechanics and other liens within 60 days after
receipt by Tenant of notice of the filing of such lien against the Premises. If
Tenant shall fail to cause such lien to be discharged within the period
aforesaid, then, in addition to any other right or remedy, Landlord may, but
shall not be obligated to, discharge the same either by paying the amount
claimed to be due or by procuring the discharge of such lien by deposit or by
bonding proceedings; and in any such event Landlord shall be entitled, if
Landlord so elects, to compel the prosecution of an action for the foreclosure
of such lien by the lien or and to pay the amount of the judgment in favor of
the lienor with interest, costs and allowances. Any amount so paid by Landlord
and all costs and expenses incurred by Landlord, in connection therewith shall
constitute Additional Rent payable by Tenant under this Lease and shall be paid
by Tenant on demand.

 

5.5 Signs. Tenant shall not erect any signs upon the exterior of the Building or
upon the Land unless they comply with all Legal Requirements and serve to
identify

 

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Tenant’s business. Tenant shall, at its expense, comply with all Legal
Requirements in connection with its signs. Upon termination of this Lease,
Tenant shall, upon notice from Landlord, remove such signs and repair any damage
to the Premises resulting from such removal.

 

5.6 Antenna. If Tenant is not in default under this Lease, Tenant may, at its
expense, install, operate and maintain for use in conjunction with Tenant’s
business in the Premises a satellite antenna or similar terrestrial radio
antenna and associated equipment and cables (all of the foregoing components of
the installation will be referred to as the “Antenna”), subject to the terms and
conditions of this SECTION.

 

(1) Tenant shall not install the Antenna without the prior written approval of
Landlord and shall install same in compliance with all Legal Requirements.
Landlord will approve or disapprove the installation of the Antenna within a
reasonable time after Landlord receives from Tenant all of the following: (i)
the proposed location of the Antenna, including the location of all associated
equipment and cabling; (ii) detailed plans and specifications for the
installation of the Antenna; (iii) the identity and background information
concerning any contractor Tenant desires to use for the installation, operation,
or maintenance of the Antenna; and (iv) a certificate of insurance evidencing
any insurance coverage reasonably required by Landlord for the installation and
operation of the Antenna. The mounting of the Antenna shall not penetrate the
Building’s roof membrane.

 

(2) Installation of the Antenna will be performed in a manner that does not
damage the roof of the Building or any other portion of the Premises. If Tenant
employs a contractor or contractors to install the Antenna, Landlord may at its
option require waivers of mechanics’ liens from all persons or entities
supplying labor and materials for the installation.

 

(3) The installation, operation, maintenance and removal of the Antenna will be
at Tenant’s sole risk and expense. Tenant shall defend, indemnify and save
Landlord harmless from and against all liabilities, claims, costs, expense and
damage in connection with or arising out of the installation, operation,
maintenance or removal of the Antenna. The foregoing indemnity includes all
reasonable attorneys’ fees and investigation costs arising out of any claim,
demand or litigation concerning the Antenna.

 

(4) At the Expiration Date, or upon termination of the operation of the Antenna
by Tenant, Tenant shall remove the Antenna at its expense, and restore or repair
any affected areas to their original condition. If Tenant does not remove the
Antenna within 15 days after notice from Landlord, Landlord may, without
liability to Tenant, remove and dispose of the Antenna, and restore or repair
any affected areas, at Tenant’s expense.

 

6. REPAIRS.

 

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(1) During the term, except as specified in SUBSECTION (2) below, Tenant at its
expense shall take good care of the Premises, the building systems therein, keep
the same in good order and condition and make all necessary repairs and
replacements thereto, interior and exterior, ordinary and extraordinary,
foreseen and unforeseen, whether or not resulting from the negligence or willful
act of Tenant, its employees, agents, invitees or contractors (collectively,
“Tenant’s Representatives”). Tenant shall maintain a service contract on the
HVAC system. Tenant shall keep the Premises clean and orderly, free from
accumulations of rubbish and unlawful obstructions.

 

(2) Landlord shall be responsible for necessary repairs and replacement of the
Structural Parts (as hereafter defined) of the Building. As used herein, the
term “Structural Parts” shall mean the roof, exterior structural walls (except
for windows), structural support beams and the foundation of the Building.
Landlord shall also be responsible for all landscaping and for snow plowing.

 

(3) The necessity for and adequacy of repairs to the Premises under this Article
shall be measured by the standard which is appropriate for buildings, parking
areas and properties of similar construction and class, as the Premises may be
improved by Tenant from time to time.

 

(4) Landlord shall not be required to furnish any services or facilities or to
make any repairs or alterations in or to the Premises. Tenant hereby assumes the
full and sole responsibility for the condition, operation, repair, replacement,
maintenance and management of the Premises.

 

7. INSURANCE.

 

(1) Tenant shall, at its expense, secure and maintain (i) general liability
insurance written on a so- called commercial general liability form, with
combined single limit coverage (for personal injury, property damage or death
arising out of any occurrence) of at least $1,000,000 and an umbrella policy of
at least $4,000,000.00, naming Landlord and every mortgagee as additional
insureds under the policy and insuring, without limitation, Tenant’s contractual
liability hereunder; (ii) all risk casualty insurance covering the Premises in
the name of Landlord, with a standard mortgagee clause in favor of any mortgagee
of Landlord as an additional insured, if requested, in the amount of 100% of the
current replacement cost of the Premises, to be redetermined by Tenant’s
insurance company at least biannually upon written notice to Landlord,
containing all insurance coverages ordinarily covered thereby upon written
notice to Landlord, including without limitation business income and extra
expense insurance payable for not less than one (1) year; and (iii) such other
and/or increased insurance as Landlord may reasonably require from time to time,
naming such insureds as Landlord shall designate. If Tenant shall voluntarily
maintain any liability insurance in an amount greater than required hereunder,
such insurance shall comply with the requirements of this SECTION. Landlord
shall not

 

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carry casualty insurance on any part of the Premises, or if for any reason it is
required to do so, the parties shall cooperate to avoid duplication of coverage
or premium.

 

(2) Tenant shall deliver to Landlord duplicate certificates of such insurance
prior to the Commencement Date and shall deliver new certificates at least 30
days prior to the expiration of the existing coverage. Such certificates shall
provide that in the event of termination or material change in coverage,
Landlord shall be given 30 days’ advance notice in writing sent by certified
mail to the address of Landlord. All liability and property insurance policies
shall include a severability of interest clause and shall be effected under
policies issued by insurers which are licensed to do business in Connecticut,
are well rated by national rating organizations and have been approved in
writing by Landlord, which approval shall not be unreasonably withheld.

 

8. SUBORDINATION.

 

(1) This Lease is and shall be subject and subordinate to any and all mortgages
and ground leases now or hereafter affecting the fee title of the Demised
Premises, and to any and all present and future extensions, modifications,
renewals, replacements and amendments thereof. Within ten (10) days of receipt
of request from Landlord, Tenant will execute and deliver promptly to Landlord
any certificate or instrument which Landlord from time to time may request for
confirmation of the provisions of this Lease.

 

(2) The foreclosure of a superior mortgage or the termination of a superior
lease shall not by operation of law result in the cancellation or termination of
the obligations of Tenant hereunder, and Tenant shall attorn to the holder of
any such mortgage, or the purchaser of the Demised Premises in foreclosure or
any subsequent owner of the fee, as the case may be, as Tenant’s landlord
hereunder in the event that any of them shall succeed to Landlord’s interest in
the Demised Premises.

 

(3) The subordination of this Lease shall be conditioned upon Tenant receiving
from the holder of any mortgage affecting the Demised Premises an agreement in a
standard form (a Nondisturbance Agreement) providing, in essence, that if such
holder succeeds to the rights of the Landlord hereunder, such holder shall not
disturb Tenant’s possession of the Demised Premises, so long as Tenant is not in
default hereunder beyond any applicable cure periods, except that such holder
(or the purchaser) at a foreclosure sale will not be bound by or liable for (i)
any advance payment of Net Rent, and (ii) any modification to or amendment of
this Lease made without such holder’s written consent.

 

(4) Within five (5) business days of Landlord’s written request, Tenant shall
provide the Landlord with an Estoppel Agreement in standard form providing to
Landlord and Landlord’s Lender the following information: (i) any amendments to
this Lease, (ii) that the Lease is in full force and effect, (iii) the term of
the Lease, (iv) the amount of Net Rent, taxes and insurance, (v) the amount of
any concessions claimed, (vi)

 

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that neither Landlord nor Tenant is in default, (vii) the amount of security
deposit, and (viii) that there are no commissions due to any Broker in
connection with this Lease.

 

9. DESTRUCTION OR DAMAGE.

 

(1) If the Demised Premises and/or access thereto or the Building shall be
partially or totally damaged or destroyed by fire, by casualties, by the
elements or Acts of God, Landlord shall, subject to its rights hereunder, repair
the damage and restore and rebuild the Demised Premises and/or access thereto or
the Building as nearly as may be reasonably practical to its condition and
character immediately prior to such damage or destruction, with reasonable
diligence after notice to it of the damage or destruction.

 

(2) If the Demised Premises and/or access thereto shall be partially or totally
damaged or destroyed by fire, by casualties, by the elements, or Acts of God,
the rents payable hereunder shall be abated to the extent that the Demised
Premises shall have been rendered untenantable or cannot be reasonably used for
Tenant’s intended purposes, from the date of such damage or destruction to the
date the damage shall be substantially repaired or restored or rebuilt as nearly
as may be reasonably practical to its condition and character immediately prior
to such damage or destruction. Should Tenant reoccupy a portion of the Demised
Premises during the period that the repair, restoration or rebuilding is in
progress and prior to the date that the same are made completely tenantable,
rents allocable to such portion shall be payable by Tenant from the date of such
occupancy to the date Demised Premises are made tenantable. If only a part of
the Demised Premises is made untenantable but the damage makes it unreasonable
for Tenant to operate its business in the Demised Premises and if Tenant vacates
the entire Demised Premises, all rent shall abate until the damage has been
repaired and restored by Landlord.

 

(3) In case of any damage or destruction of the Demised Premises, Landlord shall
within sixty (60) days of such damage or destruction, notify Tenant, in writing,
as to whether or not such damage or destruction, can be renovated or
reconstructed within six (6) months from the date of said damage. If, in
Landlord’s reasonable judgment, the damage or destruction cannot be renovated or
reconstructed within said six (6) month period, then Tenant may, at its option,
terminate this lease and the term and estate hereby granted, by notifying
Landlord, in writing, of such termination within twenty (20) days after the date
of Landlord’s notice.

 

(4) If Landlord’s notice states that the damage can be renovated or
reconstructed within six (6) months from the date of said notice, the Landlord
shall promptly proceed with all due diligence to restore and rebuild the Demised
Premises; and this lease shall continue in full force and effect and rent shall
abate pursuant to Section 9(2). In the event that the premises are not fully
repaired and restored within said six (6) months period, and the Landlord has
proceeded with all due diligence but has been delayed by adjustment of
insurance, labor trouble, governmental controls,

 

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Acts of God, or any other cause beyond Landlord’s control, then the time for
Landlord to complete said reconstruction and repair shall be extended by such
additional time as equals the aggregate period the Landlord has been delayed.

 

(5) If at any time prior to Landlord commencing the repair and restoration
pursuant to SECTION 9(1), the holder of a superior mortgage or any person
claiming under or through the holder of such superior mortgage takes possession
of the Building through foreclosure or otherwise, and the Building has been
substantially damaged by a casualty, such holder or person shall have a further
period of sixty (60) days from the date of so taking possession to terminate
this lease by appropriate notice to Tenant. In the event that a notice of
termination shall be given pursuant to SECTION 9(3), this lease and term and
estate hereby granted shall expire as of the date of such termination with the
same effect as if that were the date set forth as the expiration of the term of
this lease and the fixed and additional rent due and to become due hereunder
shall be apportioned as of such date if not earlier abated pursuant to SECTION
9(2).

 

(6) During the period of repair and restoration of the Demised Premises,
Landlord shall use its best efforts to assist Tenant in securing alternate
space.

 

(7) No damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Demised Premises or of the Building pursuant
to this Section. Landlord shall use its best efforts to effect such repair or
restoration promptly and in such manner, as not unreasonably to interfere with
Tenant’s use and occupancy.

 

(8) Landlord will not carry insurance of any kind on the Tenant’s property and,
except as provided by law or its breach of any of its obligations hereunder,
shall not be obligated to repair any damage thereto or replace the same.

 

(9) The provisions of this section shall be considered an express agreement
governing any case of damage or destruction of the Demised Premises by fire, by
casualties, by the elements or Acts of God, any law to the contrary, now or
hereafter in force shall have no application in such cases.

 

(10) Notwithstanding any of the foregoing provisions of this section, if
Landlord or the holder of any superior mortgage shall be unable to collect all
of the insurance proceeds (including rent insurance proceeds) applicable to
damage or destruction of the Demised Premises or the Building by fire or other
cause, by reason of some action or inaction on the part of Tenant, or any of its
employees, agents, or contractors, then, without prejudice to any other remedies
which may be available against Tenant, the abatement of Tenant’s rents provided
for in this section shall not be effective to the extent of the uncollected
insurance proceeds.

 

10. EMINENT DOMAIN.

 

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(1) If the whole or any substantial part of the Demised Premises or access
thereto shall be taken, acquired or purchased by or through condemnation
proceedings or any right of eminent domain or any other authority of law or if
the Demised Premises can no longer be used for Tenant’s purposes, the term of
this lease shall end as of the effective date of such taking. Rent shall be
apportioned as of the date of such termination.

 

(2) Landlord reserves to itself all rights to damages or compensation accruing
on account of any such taking of the real property as aforesaid, or by reason of
any act of any public or quasi-public authority for which damages are payable.
Nothing herein contained, however, shall deprive Tenant of its right to claim
and recover, in any taking or other proceedings against the condemning
authority, for its loss or damage of its fixtures, any improvements paid for by
Tenant which have not become part of the realty, the cost of removal from the
Demised Premises and all other losses and costs incident to or in consequence of
the closing or rebuilding of the Demised Premises and the land and Building of
which they are a part, without deduction therefore of any value which may be
attributable to Tenant’s leasehold estate under this lease.

 

11. ASSIGNMENT, MORTGAGE, ETC.

 

11.1 Consent; Recapture.

 

(1) Except as provided in SECTION 11.2 below, neither Tenant nor any subtenant
shall assign, mortgage or encumber this Lease, or sublease all or any part of
the Premises, or suffer or permit the Premises or any part thereof to be used by
others, without the prior written consent of Landlord in each instance, which
shall not be unreasonably withheld. If this Lease be assigned, or if the
Premises or any part thereof be sublet to or occupied by anybody other than
Tenant, Landlord may, at Landlord’s option, collect rent from the assignee,
subtenant or occupant, and apply the net amount collected to the Rent herein
reserved (and any sublease shall confirm such option), but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of this covenant or
the acceptance of the assignee, subtenant or occupants, or a release of Tenant
from the further performance by Tenant of covenants on the part of Tenant herein
contained. The consent by Landlord to an assignment or subletting shall not be
construed to relieve Tenant or its subtenants from obtaining the express consent
in writing of Landlord to any further assignment or subletting.

 

(2) An “assignment” prohibited by this SECTION shall be deemed to include the
following: if Tenant is or becomes a partnership, a withdrawal or change
(voluntary, involuntary, by operation of law or otherwise) of any of the general
partners thereof, or the dissolution of the partnership; or, if Tenant consists
of more than one (1) person, a purported assignment, transfer, mortgage or
encumbrance (voluntary, involuntary, by operation of law or otherwise) from one
(1) thereof unto the other or others thereof; or, if Tenant is or becomes a
corporation, any dissolution, merger, consolidation or other reorganization of
Tenant, or any change in the ownership (voluntary, involuntary, by

 

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operation of law, creation of new stock or otherwise) of 50 percent or more in
the aggregate of its capital stock from the ownership existing on the date of
execution hereof which results in a deterioration of the creditworthiness of the
Tenant, in the reasonable opinion of the Landlord; or, the sale of 50 percent or
more in the aggregate of the value of the assets of Tenant to an entity which,
in the reasonable opinion of the Landlord, is not as creditworthy as Tenant.

 

(3) Except as provided in SECTION 11.2 below, if Tenant desires to assign this
Lease or sublease all or 75% or more of the Premises, considering all prior
subleases and proposed subleases, Tenant shall first give notice to Landlord of
the proposed transaction and the term thereof, and Landlord shall have the
right, by notice to Tenant within 30 days after receipt of Tenant’s notice, to
terminate this Lease. If Landlord exercises its right to terminate this Lease
with respect to such portion of the Premises, then (i) the Rent shall be
proportionally reduced, and an adjustment shall be made for Rent, if any, paid
in advance and applicable to the portion of the Building no longer leased by
Tenant; and (ii) the number of parking spaces available for Tenant’s use shall
be proportionally reduced. If Landlord elects not to so terminate this Lease,
then Landlord shall not unreasonably withhold its consent to the proposed
subletting or assignment. If Tenant has not completed an assignment or sublease
within 90 days after Landlord has elected not to terminate this Lease, Tenant
shall repeat the offer to Landlord under this SUBSECTION.

 

11.2 Affiliates.

 

(1) Notwithstanding the foregoing, without Landlord’s consent and without being
subject to Landlord’s rights under SUBSECTION 11.1(3) above but upon ten (10)
days’ prior notice to Landlord, this Lease may be assigned, or the Premises may
be sublet, to any corporation, which is a Parent, Subsidiary or Affiliate of
Tenant. Within ten (10) days after the execution of any such assignment or
sublease, Tenant shall deliver a complete copy of the documentation to Landlord.
For the purposes of this SECTION, a “Parent” means a corporation that owns 100%
of the outstanding stock of Tenant; a “Subsidiary” means any corporation not
less than 100% of whose outstanding stock shall be owned by Tenant; and an
“Affiliate” means any corporation not less than 100% of whose outstanding stock
shall be owned by Tenant’s Parent.

 

11.3 Profit Sharing; Continuing Liability.

 

(1) Tenant shall pay to Landlord any costs incurred by Landlord in considering
any proposed assignment or subletting under this SECTION, including attorney’s
fees and costs payable to Landlord’s ground lessor and/or mortgagee. It shall
not be unreasonable for Landlord to withhold its consent to a proposed
assignment or subletting if the approval of Landlord’s ground lessor or
mortgagee shall be required and be refused.

 

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(2) If Landlord elects not to terminate this Lease in whole or in part under
SUBSECTION 11.1(3) above and if Landlord then gives its consent to any
assignment of this Lease or to any sublease, which consent shall not be
unreasonably withheld, or if Landlord shall not have a right of termination
pursuant to SECTION 11.2 herein, Tenant shall, in consideration therefor, pay to
Landlord as Additional Rent:

 

(1) in the case of an assignment, an amount equal to 50% of all sums and other
consideration paid to Tenant by the assignee for or by reason of such assignment
(including any sums paid for the sale, rental or use of Tenant’s property in
excess of the then unamortized value of Tenant’s property as reflected in
Tenant’s federal income tax returns), less the reasonable brokerage commissions,
legal fees, rent concessions, fit-up costs and other similar costs, if any,
actually paid by Tenant in connection with such assignment; and

 

(2) in the case of a sublease, 50% of any rents, additional charges or other
consideration payable under the sublease to Tenant by the subtenant (including
any sums paid for the sale, rental or use of Tenant’s property in excess of the
then unamortized value of Tenant’s property as reflected in Tenant’s federal
income tax returns) which are in excess of the Rent during the term of the
sublease in respect of the subleased space, less the reasonable brokerage
commissions, legal fees, rent concessions, fit-up costs and other similar costs,
if any, actually paid by Tenant in connection with such subletting.

 

The sums payable hereunder shall be paid to Landlord as and when received from
the assignee or subtenant to Tenant.

 

(3) No assignment or subletting shall affect the continuing primary liability of
Tenant (which, following assignment, shall be joint and several with all
assignees), and Tenant shall not be released from performing any of the terms,
covenants and conditions of this Lease. Every assignee shall in the assignment
instrument, assume all of the obligations of Tenant hereunder from and after the
effective date of the assignment.

 

12. CURING DEFAULTS.

 

If Tenant shall default in the observance or performance of any term or covenant
of this Lease, Landlord may, after ten (10) days’ notice to Tenant to cure the
default and failure of Tenant to cure the same within such period, or at any
time thereafter without notice in event of emergency, perform the same for the
account of Tenant. If Landlord makes any expenditures or incurs any obligations
in connection with a default by Tenant, including, but not limited to,
reasonable attorneys’ fees in instituting, prosecuting or defending any action
or proceeding against Tenant, such reasonable sums paid or

 

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obligations incurred with interest (as provided below) and costs shall be deemed
to be Additional Rent hereunder and shall be paid by Tenant to Landlord within
ten (10) days of rendition of any bill or statement to Tenant hereunder.

 

13. NO REPRESENTATIONS BY LANDLORD; INDEMNIFICATION.

 

(1) Tenant acknowledges that Landlord and Landlord’s employees and agents have
made no representations or promises with respect to the Premises, including the
uses permitted under applicable law. Tenant further represents that it presently
occupies the Premises under a previous lease agreement and accepts the Premises
“AS IS”.

 

(2) Neither Landlord, nor any employee, agent or contractor of Landlord, shall
be liable to Tenant or Tenant’s Representatives (i) for any damage to or loss of
any property of Tenant or such other person, irrespective of the cause of such
damage or loss; or (ii) for any personal injury to Tenant or such other person
from any cause, other than the negligence or willful misconduct of Landlord, its
agents, employees or contractors.

 

(3) Tenant shall defend, indemnify and hold harmless Landlord, its successors
and assigns, employees, agents and contractors, against and from all
liabilities, including reasonable attorneys’ fees, which may be imposed upon or
incurred by or asserted against Landlord or such other persons in connection
with the Premises, including without limitation by reason of any of the
following occurring during the Lease term or prior thereto when Tenant has been
given access to the Premises: (i) any work or thing done in the Premises by or
at the instance of Tenant or any of Tenant’s Representatives; (ii) any
negligence or wrongful act or omission of Tenant or any of Tenant’s
Representatives; (iii) any accident, injury, loss or damage to any person or
property occurring in the Premises; (iv) any failure on the part of Tenant or
any of Tenant’s Representatives to comply with any of the terms of this Lease.

 

(4) Landlord shall defend, indemnify and hold harmless Tenant, its successors
and assigns, employees, agents and contractors, against and from all
liabilities, including reasonable attorneys’ fees, which may be imposed upon or
incurred by or asserted against Tenant or such other persons in connection with
the Premises, including without limitation by reason of any of the following
occurring during the Lease term or prior thereto when Tenant has been given
access to the Premises: (i) any work or thing done in the Premises by or at the
instance of Landlord or any of Landlord’s Representatives; (ii) any negligence
or wrongful act or omission of Landlord or any of Landlord’s Representatives;
(iii) any failure on the part of Landlord or any of Landlord’s Representatives
to comply with any of the terms of this Lease.

 

14. INTERRUPTION OF SERVICES; FORCE MAJEURE.

 

Except as otherwise provided in SECTION 10 herein, there shall be no abatement
of

 

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Rent, nor shall this Lease or any of the obligations of Tenant be affected or
reduced by the interruption or termination of any of the systems or services
affecting the Premises. Landlord does not warrant that any service will be free
from interruptions caused by repairs, renewals, improvements, changes of
service, alterations, strikes, lockouts, labor controversies, accidents,
inability to obtain fuel, water, or supplies, or other causes beyond the
reasonable control of Landlord. No such interruption of service shall be deemed
an eviction or disturbance of Tenant’s use and possession of the Premises, or
render Landlord liable to Tenant for damages by abatement of Rent or otherwise,
or relieve Tenant from performance of Tenant’s obligations under this Lease.
Tenant hereby waives and releases all claims against Landlord for damages for
interruption or stoppage of services.

 

15. QUIET ENJOYMENT; HOLDOVER.

 

(1) Upon Tenant paying the Rent and observing and performing all the terms,
covenants and conditions on Tenant’s part to be observed and performed, Tenant
may peaceably and quietly enjoy the Premises hereby demised, free from any
interference, molestation or acts of Landlord or of anyone claiming by, through
or under Landlord, subject, nevertheless, to the terms and conditions of this
Lease, including SECTION 8 herein.

 

(2) If Tenant retains possession of the Premises or any part thereof after the
expiration of the term or earlier termination date without the written consent
of Landlord, Tenant’s occupancy shall be under all of the terms and conditions
of this Lease, except that (i) the tenancy shall be at will, terminable by
either party on ten (10) days’ written notice; (ii) the monthly Net Rent shall
be 200% of that specified herein for the month preceding the termination; and
(iii) Tenant shall indemnify and hold Landlord harmless from all damages
sustained and liabilities incurred by Landlord as a result of Tenant’s continued
occupancy beyond ten (10) days after Landlord’s notice to Tenant under this
SUBSECTION.

 

16. DEFAULT.

 

(1) If Tenant defaults in fulfilling any of the covenants of this Lease, other
than the covenants for the payment of Net Rent, Additional Rent and/or Rent then
the covenant for maintaining insurance as set forth in SECTION 7, then, in any
one (1) or more of such events, upon Landlord serving a written 30 day notice
upon Tenant specifying the nature of said default and upon the expiration of
said 30 days, if Tenant shall have failed to comply with or remedy such default
(or if the said default or omission complained of shall be of such a nature that
the same cannot be completely cured or remedied within said 30 day period and if
Tenant shall not have diligently commenced curing such default within such 30
day period, and shall not thereafter with reasonable diligence and in good faith
proceed to remedy or cure such default within 60 days after the date of
Landlord’s notice, then Landlord may cancel this Lease provided, however that
Landlord will not cancel this Lease if Tenant has made substantial compliance in
its efforts to cure such default. In such event, this Lease and the term
hereunder shall end and expire as fully and completely as if

 

15

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the date of cancellation were the day herein definitely fixed for the end and
expiration of this Lease and the term hereof. Tenant shall then quit and
surrender the Premises to Landlord, but Tenant shall remain liable as
hereinafter provided.

 

(2) If (i) the notice provided for in SUBSECTION (1) above shall have been given
and the term shall expire as aforesaid; or (ii) if Tenant shall fail to make
payment of any item of Net Rent, Additional Rent and/or Rent or any part thereof
for a period of ten (10) days after notice by Landlord to Tenant of such
default; or (iii) if any execution shall be issued against Tenant or any of
Tenant’s property whereupon the Premises shall be taken or occupied or attempted
to be taken or occupied by someone other than Tenant; then and in any of such
events, Landlord may without notice, re-enter the Premises, and dispossess
Tenant, and the legal representative of Tenant or other occupant of the
Premises, by summary proceedings or otherwise, and remove their effects and hold
the Premises as if this Lease had not been made, and Tenant hereby waives the
service of notice of intention to re-enter or to institute legal proceedings to
that end, but Tenant shall remain liable as hereinafter provided.

 

(3) Landlord shall not be deemed to be in default in the performance of any of
his obligations under this Lease unless and until it has failed to perform such
obligation within 30 days after notice by Tenant to Landlord specifying the
nature of Landlord’s failure; provided, however, that if the nature of the
obligation is such that more than 30 days are reasonably required for its
performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such 30 day period and thereafter diligently
prosecute the same to completion. If the Premises or any part thereof are at any
time subject to a mortgage and Tenant is given notice of the name of the
mortgagee thereunder, then Tenant shall give written notice to such mortgagee of
any default on the part of Landlord hereunder, specifying the nature of such
default in reasonable detail, and affording such mortgagee a reasonable amount
of time to cure such default for and on behalf of Landlord, which period shall
include a reasonable time for the mortgagee to obtain possession of the
Premises.

 

17. REMEDIES OF LANDLORD.

 

In case of any such default, re-entry, expiration and/or dispossess by summary
proceedings or otherwise: (a) the Rent shall become due thereupon and be paid up
to the time of such re-entry, dispossess and/or expiration, together with such
expenses as Landlord may incur for legal expenses, brokerage and/or putting the
Premises in good order, or for preparing the same for re-rental; (b) Landlord
may re-let the Premises or any part or parts thereof, either in the name of
Landlord or otherwise, for a term or terms, which may at Landlord’s option be
less than or exceed the period which would otherwise have constituted the
balance of the term of this Lease and may grant concessions of free rent; and/or
(c) Tenant or the legal representatives of Tenant shall also pay Landlord for
the failure of Tenant to observe and perform Tenant’s covenants herein
contained, any deficiency between (i) the Rent hereby reserved and/or covenanted
to be paid, and (ii) the

 

16

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net amount, if any, of the rents collected on account of the lease or leases of
the Premises for each month of the period which would otherwise have constituted
the balance of the term of this Lease. In computing same there shall be added to
such deficiency such expenses as Landlord may incur: (x) in connection with
re-letting the Premises, including without limitation, legal expenses, brokerage
commissions and expenses incurred in maintaining the Premises in good order and
in connection with renovating and preparing the same for re-letting; and (y) as
a result of Tenant’s failure to comply with any of its obligations under
SECTIONS 6 and/or 25 hereof. Any Rent not paid by Tenant within 10 days after
the due date thereof shall thereafter be payable with interest at the rate of 3%
per annum in excess of the prime rate established by The Wall Street Journal (or
its successor) in effect from time to time, from the due date to the date of
full payment. Any such amounts shall be paid in monthly installments by Tenant
on the rent day specified in this Lease, and any suit brought to collect the
amount of the deficiency for any month shall not prejudice in any way the rights
of Landlord to collect the deficiency for any subsequent month by a similar
proceeding. In addition, Landlord shall have the alternative of commencing suit
against Tenant at any time for the amount equal to the Rent reserved for the
balance of the Lease, less the fair rental value of the Premises for the same
period. Landlord at its option may make such alterations, repairs, replacements
and/or decorations in the Premises as reasonably required for the purpose of
re-letting same, and the making of such alterations and/or decorations shall not
operate or be construed to release Tenant from liability hereunder. The failure
of Landlord to re-let the Premises or any part thereof shall not release or
affect Tenant’s liability hereunder, nor shall Landlord in any event be liable
in any way whatsoever for failure to re-let the Premises. In the event of a
breach by Tenant of any of the covenants or provisions hereof, Landlord shall
have the right of injunction and the right to invoke any remedy allowed at law
or in equity, as if re-entry, summary proceedings and other remedies were not
herein provided for. Mention in this Lease of any particular remedy shall not
preclude Landlord from any other remedy, in law or in equity.

 

18. RIGHT TO EXHIBIT PREMISES AND ACCESS TO PREMISES.

 

Landlord reserves the right to enter the Premises and exhibit same at any
reasonable time (i) to prospective mortgagees, purchasers and ground lessees and
(ii) to prospective tenants at any time within nine (9) months prior to the
expiration of the Lease term, provided however, that Landlord shall not disturb,
interrupt, or interfere with Tenant’s normal business operations and Landlord
shall not divulge any confidential information that Landlord obtains.

 

19. BROKERAGE.

 

Tenant warrants and represents it has not had or dealt with any realtor, broker
or agent in connection with the negotiation of this Lease, and Tenant shall
defend, pay and hold Landlord harmless from any cost, expense or liability
(including costs of suit and

 

17

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reasonable attorneys’ fees) for any compensation, commission or charges claimed
by any realtor, broker or agent with respect to this Lease and the negotiation
thereof.

 

20. LEASE STATUS AND NOTICE.

 

(1) Within ten (10) business days after receipt of notice from Landlord, Tenant
will execute and deliver to Landlord, an instrument prepared by Landlord
stating, if the same be true, that this Lease is a true and exact copy of the
lease between the parties hereto; there are no amendments hereof (or stating
what amendments there may be); the same is then in full force and effect; to the
best of Tenant’s knowledge, there are then no offsets, defenses or counterclaims
with respect to the payment of rent reserved hereunder or in the performance of
the other terms, covenants and conditions hereof on the part of Landlord or
Tenant to be performed; that as of such date no default has been declared
hereunder by either party hereto and that Tenant at the time has no knowledge of
any facts or circumstances which it might reasonably believe would give rise to
a default by either party; and such other information as may reasonably be
requested by Landlord or a party with whom Landlord may be dealing.

 

(2) Within ten (10) business days after receipt of notice from Tenant, Landlord
will execute and deliver to Tenant, an instrument prepared by Tenant stating, if
the same be true, that this Lease is a true and exact copy of the lease between
the parties hereto; there are no amendments hereof (or stating what amendments
there may be); the same is then in full force and effect; that as of such date
no default has been declared hereunder by either party hereto and that Landlord
at the time has no knowledge of any facts or circumstances which it might
reasonably believe would give rise to a default by either party; and such other
information as may reasonably be requested by Tenant or a party with whom Tenant
may be dealing.

 

(3) Any notice, demand, consent, approval, direction, agreement or other
communication required or permitted hereunder or under any other documents in
connection herewith shall be in writing and shall be directed as follows:

 

If to Landlord:          381 Connecticut Avenue Corporation            225
Wilson Avenue            Norwalk, Connecticut 06854            Attention: Mr.
David Genovese            Facsimile: 203-327-0203

 

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with a copy to:          Jacobi & Case, P.C.            300 Bic Drive       
    Milford, Connecticut 06460            Attention: Max S. Case, Esq.       
    Facsimile: (203) 874-6469 If to Tenant:          Bolt Technology Corporation
           4 Duke Place            Norwalk, Connecticut 06854       
    Attention: Raymond Soto            Facsimile:203-854-9601 with a copy to:
         Levett Rockwood P.C.            33 Riverside Avenue       
    Westport, CT 06880            Attention: Barbara A. Young, Esq.       
    Facsimile: (203) 226-8025

 

or to such changed address or facsimile number as a party hereto shall designate
to the other parties hereto from time to time in writing. Notices shall be (i)
personally delivered (including delivery by UPS or other comparable nation-wide
overnight courier service) to the offices set forth above, in which case they
shall be deemed delivered on the date of delivery (or first business day
thereafter if delivered other than on a business day or after 5:00 p.m. Norwalk,
Connecticut time to said offices); (ii) sent by certified mail, return receipt
requested, in which case they shall be deemed delivered on the date shown on the
receipt, unless delivery is refused or delayed by the addressee in which event
they shall be deemed delivered 3 days after the date of deposit in the U.S.
Mail; or (iii) sent by means of a facsimile transmittal machine, in which case
they shall be deemed delivered at the time and on the date of receipt thereof
confirmed by telephonic acknowledgment or first business day thereafter if
receipted other than on a business day or after 5:00 p.m. Norwalk, Connecticut
time.

 

21. ASSIGNS; LANDLORD’S INTEREST.

 

(1) The covenants, conditions and agreements contained in this Lease shall bind
and inure to the benefit of Landlord and Tenant and their respective, heirs,
successors and, except as otherwise provided in this Lease, their assigns.

 

(2) Tenant shall look solely to the estate and interest of Landlord, his heirs,
successors and assigns, in the Premises for the collection of a judgment in the
event of a default by Landlord hereunder, and no other property or assets of
Landlord or any partner, shareholder, director or officer of Landlord, or of any
partner of Landlord, shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant’s remedies.

 

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22. SECURITY DEPOSIT.

 

Tenant has deposited with Landlord the sum of $9,900.00 (the “Security Deposit”)
as security for the performance by Tenant of the provisions of this Lease. If
Tenant defaults hereunder, Landlord may apply or retain the Security Deposit to
the extent required to cure the default and to satisfy Landlord’s damages; and
Tenant will, upon Landlord’s demand, restore the amount of the Security Deposit
to the original amount specified above. Tenant may not assign or encumber the
Security Deposit, and Landlord shall not be bound by any attempted assignment or
encumbrance. Landlord shall transfer the Security Deposit to the purchaser of
the Premises, and thereupon Landlord shall be released from all liability for
return of the Security Deposit. Upon the termination of this Lease and Tenant
having complied with all of its obligations hereunder, Landlord shall return the
Security Deposit to Tenant.

 

23. OPTION TO EXTEND.

 

(1) Tenant shall have one (1) option to extend the term of this Lease for one
additional period of five (5) years, upon all of the terms and conditions of
this Lease, except that (i) the Net Rent during option terms shall be as
follows.

 

(a) The Net Rent for Option Years 1 through 5 shall be calculated based upon the
previous Lease Year 5 rent of $118,800.00 plus an increase based upon an
increase in the Consumer Price Index for the previous five year period. In no
event shall the Net Rent for Option Years 1 through 5 be less than the Net Rent
for years 1 through 5. The increase shall be calculated by using the revised
Consumer Price Index for the Northeast Region (1982-84 = 100) for All Urban
Consumers and All Items, of the Bureau of Labor Statistics of the United States
Department of Labor (“CPI-U” or the “Index”). As promptly as practicable after
January 1, 2008, Landlord shall compute the increase, if any. The Index number
for the Northeast Region for the month of January, 2003, shall be the “Base
Index Number” and the corresponding Index number of the month of January, 2008,
shall be the “Current Index Number.” The Current Index Number shall be divided
by the Base Index Number. The percentage of increase multiplied by $118,800.00
shall be added to the $118,800.00 and then multiplied 5 times shall be the Net
Rent for the period of January 10, 2008 to January 9, 2013. The Net Rent for
Option Years 1 through 5 shall be payable in sixty (60) equal monthly
installments, in advance, starting on January 10, 2008 and on the 10th day of
each calendar month of the Option Years 1 through 5.

 

(b) Any dispute between the parties as to any such computations shall be
determined by arbitration under the direction of the American Arbitration
Association in Norwalk, Connecticut.

 

The increased Net Rent shall be due and payable to the Landlord in equal monthly
installments commencing with the first month after the calculation is complete,
and in the

 

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event of any subsequent redetermination of such amount the adjustment thus
indicated shall be made promptly between the Landlord and Tenant.

 

If the publication of the Consumer Price Index for the Northeast Region shall be
discontinued, the parties shall accept comparable statistics on the cost of
living for the area presently comprising the Northeast Region, as they shall be
computed and published by an agency of the United States or by a responsible
financial periodical of recognized authority then to be selected by the parties
or, if the parties cannot agree upon a selection, by arbitration. In the event
of (1) use of the comparable statistics in place of the Consumer Price Index, or
(2) publication of the Index figure at other than monthly intervals, there shall
be made in the method of computation such revisions as the circumstances may
require to carry out the intent of this Article, and any dispute between the
parties as to the making of such adjustment shall be determined by arbitration
under the direction of the American Arbitration Association in Norwalk,
Connecticut.

 

If a change in the Index results in the existence of two overlapping indices for
the same period, the newest index shall be used to calculate increase in rent.

 

(2) The option may be exercised only by notice of exercise given by Tenant to
Landlord nine (9) months’ prior to the expiration of the current term of the
Lease. Failure to so exercise within such period shall render any subsequent
attempted exercise void and of no effect, any principles of law to the contrary
notwithstanding. The option may not be exercised within the applicable time
period if Tenant shall have committed a default hereunder which has not been
cured either at the time of the attempted exercise or at the time of the
proposed commencement of the extension term.

 

24. ENVIRONMENTAL MATTERS.

 

(1) Definitions. The following terms, as used in this Lease, shall be defined as
follows:

 

(a) “Environmental Laws” means all federal, state and local laws, statutes,
ordinances, rules, regulations and orders which have the effect of law and now
or hereafter applicable to the environment or pollution or the use, handling,
generation, storage, management, treatment, discharge and/or disposal or release
of Hazardous Substances, including without limitation: (A) the provisions of the
Clean Air Act (“CAA”), the Toxic Substances Control Act (“TSCA”), the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, (“CERCLA”), the Clean Water Act (“CWA”), the Resource Conservation and
Recovery Act, as amended by the Hazardous and Solid Waste Amendments of 1984
(“RCRA”), the Occupational Safety and Health Act (“OSHA”), as amended, and all
rules, regulations and orders thereunder and all amendments to any of the
foregoing; (B) the environmental, health and safety provisions of the laws of
the State of Connecticut now or hereafter applicable to the environment or
pollution or the use, handling, generation, storage, management, treatment,
discharge, and/or disposal or

 

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release of Hazardous Substances (the “Connecticut Environmental Laws”); (C) all
rules, regulations and orders thereunder and all amendments to any of the
foregoing; and (D) all similar Federal or Connecticut state and local laws,
rules, regulations and orders;

 

(b) “Hazardous Substances” means (A) toxic substances, contaminated material,
asbestos, oil and petroleum products, waste oil, chemical liquids, solid, liquid
or gaseous products and all other substances now or hereafter within the scope
of any of the Environmental Laws; (B) any industrial waste-water discharges
subject to regulation under CWA, as amended; (C) any source material, spent
nuclear fuel, radioactive waste or byproduct material as defined by the Atomic
Energy Act of 1954, 42 U.S.C. SECTION 2014, as amended, (D) “waste materials,”
“solid waste,” “hazardous waste” or “hazardous substances” as such terms are
defined to have in any of the Environmental Laws, including without limitation,
RCRA, as amended, CERCLA, as amended, the Hazardous Materials Transportation
Act, as amended, TSCA, as amended, the Connecticut Environmental Laws, and all
rules, regulations and orders under any of the foregoing, or any other similar
state laws, state regulations or local ordinances, and (F) the group of organic
compounds known as polychlorinated biphenyls.

 

(2) Compliance with Laws. Tenant, at its sole cost and expense, shall be
responsible for the conduct of its operations on the Leased Premises in
compliance with all applicable Environmental Laws and shall not permit the
violation of any Environmental Law on the Leased Premises.

 

(3) Landlord Access. Landlord has the right to enter the Leased Premises upon
twenty four (24) hours prior notice to inspect and/or to conduct environmental
compliance audits of Tenants operations. Tenant shall provide Landlord with
access to key employees and records necessary to demonstrate compliance with
Environmental Laws. However, in the event of an emergency or an inspection
conducted by a governmental agency, Landlord shall have the right to enter the
Leased Premises without prior notice

 

(4) Duty to Inform. Tenant shall promptly notify Landlord upon the release,
discharge or spill of any Hazardous Substances at the Leased Premises or Real
Property by Tenant, its employees, contractors, agents or invitees. Tenant shall
promptly notify Landlord of an inspection of the Leased Premises by any
governmental agency.

 

(5) Duty to Remediate. In the event that Tenant, its employees, contractors,
agents, or invitees causes a release, spill, discharge, or disposal of Hazardous
Substances on the Leased Premises or Real Property, Tenant, at its sole cost and
expense, shall investigate, remediate and monitor the release, discharge, spill
or disposal in accordance with all Environmental Laws including the Connecticut
Remediation Standard Regulations.

 

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(6) Underground Storage Tanks. Tenant shall not install and/or operate any
underground storage tanks on the Leased Premises.

 

(7) Transfer Act. On or after the Commencement Date, Tenant shall not conduct,
or permit the conduct, of any activities on the Leased Premises that would cause
the Leased Premises or Real Property to become an “establishment”, as that term
is defined in the Transfer Act, Conn. General Statutes 22a-134 et seq.,
including, without limitation, the generation of more than one hundred (100)
kilograms of hazardous waste in any one month.

 

(8) Indemnification. Tenant shall indemnify, defend, and hold Landlord harmless
from any liabilities, penalties, fines, judgments, causes of action,
obligations, actions, losses, costs, damages, expenses, orders, environmental
response costs (including investigation, cleanup, removal, remediation,
monitoring and mitigation), claims, suits, and reasonable attorneys’ fees of any
nature (including, but not limited to, any and all damage to property, injury to
person, death, and environmental contamination or damage), sustained or incurred
by or claimed against the Landlord, in any manner, directly or indirectly,
arising from or related to: (i) the release, spill, discharge or disposal of
Hazardous Substances on the Leased Premises or Real Property by Tenant, its
agents, employees, contractors and invitees prior to, on or after the
Commencement Date; or (ii) the violation of any Environmental Law by Tenant, its
agents, employees, contractors or invitees; or (iii) Tenant’s breach of any
representation, warranty or covenant set forth in this Section 24. Tenant agrees
to indemnify and hold harmless Landlord from any and all reasonable expenses,
court costs and reasonable attorneys’ fees of any nature suffered, sustained or
incurred by Landlord in seeking to enforce Tenant’s indemnification obligation.

 

25. WAIVER. TENANT HEREBY ACKNOWLEDGES THAT THIS LEASE CONSTITUTES A COMMERCIAL
TRANSACTION AS SUCH TERM IS USED AND DEFINED IN SECTION 52-278(a) OF THE
CONNECTICUT GENERAL STATUTES, AS AMENDED, AND HEREBY EXPRESSLY WAIVES ANY AND
ALL RIGHTS WHICH ARE OR MAY BE CONFERRED UPON TENANT BY SAID ACT TO ANY NOTICE
OR HEARING PRIOR TO A PREJUDGMENT REMEDY UNDER SECTIONS 52-278(a) TO 52-278(g),
AS AMENDED. IN THE EVENT THAT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR
ACTION FOR NON-PAYMENT OF RENT OR OTHER CHARGES PROVIDED FOR IN THIS LEASE,
TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM IN ANY SUCH PROCEEDING OR ACTION.
TENANT AND LANDLORD WAIVE A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING IN ANY
ACTION OR PROCEEDING UNDER OR CONNECTED WITH THIS LEASE.

 

26. MISCELLANEOUS

 

(1) This Lease shall be governed in all respects by the laws of the State of
Connecticut.

 

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(2) Tenant shall not record this Lease in part or in whole, and any such
recordance shall be a breach which cannot be cured. At Tenant’s request Landlord
shall execute a statutory Notice of Lease which Tenant may record.

 

(3) The failure of a party to insist in any one (1) or more instances upon the
strict performance of any one (1) or more of the agreements, terms, covenants,
conditions or obligations of this Lease, or to exercise any right, remedy or
election herein contained, shall not be construed as a waiver or relinquishment
for the future of the performance of such one (1) or more obligations of this
Lease or of the right to exercise such election, but the same shall continue and
remain in full force and effect with respect to any subsequent breach, act or
omission, whether of a similar nature or otherwise.

 

(4) Indemnification and payment obligations of the parties arising under this
Lease shall survive the Expiration Date or sooner termination of the term
hereof, as same may be extended hereunder.

 

(5) Any provision of this Lease which requires Landlord not to unreasonably
withhold its consent shall never be the basis for an award of damages or give
rise to a right of setoff or termination to Tenant, but may be the basis for a
declaratory judgment or specific injunction with respect to the matter in
question.

 

(6) The language of this Lease shall be construed according to its normal and
customary meaning and not strictly for or against Landlord or Tenant, without
regard to whose counsel drafted the provision in question.

 

(7) Tenant shall, from time to time, deliver to Landlord its Annual Report and
any other financial report that constitutes public record.

 

(8) If at any time during the term, Tenant’s obligations under this Lease,
including the payment of Rent, cannot be fully performed without violating any
federal, state or local law regulating rents or otherwise, the Rent payable
hereunder, in the case of such rent regulation law, and, in the case of any
other such law preventing or prohibiting the full performance of Tenant’s
obligations under this Lease, the time, manner or content or performance of such
obligations, shall be equitably adjusted by Landlord, by notice to Tenant, to
compensate Landlord over the term for any rent foregone by reason of said rent
regulation, and so that Landlord shall be deprived of the benefit of its bargain
to the least extent possible in keeping with the spirit of this Lease. In the
event that any such law is later repealed or modified, Tenant shall again, to
the extent permitted by law, comply with all of the original terms of this Lease
and, within 30 days after demand by Landlord, shall pay to Landlord the full
amount of Rent and shall perform all of its additional obligations that such law
or laws had prevented Tenant from paying or performing, whether or not the Lease
term shall have then terminated.

 

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27. SURRENDER OF PREMISES.

 

(1) At the expiration of the Lease term, including any option periods described
in Paragraph 23 (the “Expiration Date”), Tenant will peacefully yield up to
Landlord the Premises, broom clean, in at least as good order and repair after
the Tenant has completed Tenant’s work delivered to Tenant, damage by fire,
casualty and ordinary wear and tear excepted. Any property left by Tenant in the
Premises shall be deemed abandoned by Tenant.

 

(2) During the last six months of the Lease term, Landlord may require that
Tenant, at Tenant’s expense, have an environmental audit of the Premises
conducted by an independent environmental expert selected by Landlord. If such
audit discloses the presence of any Hazardous Materials (as defined in SECTION
25 herein) or the violation of any Environmental Law (as defined in SECTION 25),
for which Tenant is responsible under SECTION 25, Tenant shall promptly take
action as may be required by SECTION 25 to remedy same.

 

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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
the year and day first above written.

 

Signed, Sealed and Delivered

 

LANDLORD:

In the Presence of:

 

381 Connecticut Avenue Corporation

/s/ Rocco Genovese

--------------------------------------------------------------------------------

 

By

 

        /s/ R. David Genovese

--------------------------------------------------------------------------------

       

        Name: R. David Genovese

/s/ Max S. Case

--------------------------------------------------------------------------------

     

        Title: President

   

TENANT:

Bolt Technology Corporation

/s/ Joseph Espeso

--------------------------------------------------------------------------------

 

By

 

        /s/ Raymond M. Soto

--------------------------------------------------------------------------------

       

        Name: Raymond M. Soto

 

--------------------------------------------------------------------------------

     

        Title: President

 

26

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STATE OF      Connecticut   )            ) ss: Westport COUNTY OF      Fairfield
  )

 

The foregoing instrument was acknowledged before me this 10th day of January,
2003 by R. David Genovese, President of 381 Connecticut Avenue Corporation, a
Connecticut corporation, on behalf of the corporation.

 

/s/ Max S. Case

--------------------------------------------------------------------------------

[Name of person taking acknowledgment]

Commissioner of Superior Court

 

STATE OF      Connecticut   )            ) ss: COUNTY OF      Fairfield   )

 

The foregoing instrument was acknowledged before me this 8th day of January,
2003 by Raymond M. Soto, President of Bolt Technology Corporation, a Connecticut
corporation, on behalf of the corporation.

 

/s/ Rahada Khurana

--------------------------------------------------------------------------------

[Name of person taking acknowledgment]

Commissioner of Superior Court

Notary Public

My Commission Expires: September 30, 2003

 

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