EXHIBIT 10.33

 

140 Canal View Boulevard
Rochester, New York 14623

LEASE

by and between

Hub Properties Trust

as Landlord

and

Performance Technologies, Incorporated
as Tenant

 

 

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LEASE

ARTICLE 1
REFERENCE DATA

1.1              INTRODUCTION AND SUBJECTS REFERRED TO. 

This is a lease (this “Lease”) entered into by and between Hub Properties Trust,
a Maryland real estate investment trust (“Landlord”), and Performance
Technologies, Incorporated, a Delaware corporation (“Tenant”). 

Each reference in this Lease to any of the following terms or phrases shall be
construed to incorporate the corresponding definition stated in this Section
1.1.

Date of this Lease: 

As of January 1, 2012.

Building and
Property: 

That building in the Town of Brighton, New York 14623, located at 140 Canal View
Boulevard (the “Building”), and bearing tax account #149.20-1-5.12. The
Building, the parking areas appurtenant to the Building, the sidewalks and
driveways adjacent thereto, all other exterior common areas, and the land
parcels on which all of the same are located are hereinafter collectively
referred to as the “Property”. 

Building
Rentable Area: 

32,000 square feet.

Premises: 

The entire Building, substantially as shown on Exhibit A hereto, comprised of
two areas, one for office use (the “Office Premises”) and one for light
manufacturing, assembly and warehouse use (the “Warehouse Premises”). 

Premises
Rentable Area: 

Office Premises: 21,500 square feet.
Warehouse Premises: 10,500 square feet.

Original Terms: 

Office Premises: Sixty-six (66) months (the “Original Office Premises Term”),
commencing on the Rent Commencement Date and expiring on June 30, 2017 (the
“Original  Office Premises Term Expiration Date”), subject to extension in
accordance with Section 2.5 hereof.

Warehouse Premises: Thirty–eight (38) months (the “Original Warehouse Premises
Term”) commencing on the Rent Commencement Date and expiring on February 28,
2015 (the “Original Warehouse Premises Term Expiration Date”), subject to
extension in accordance with Sections 2.5 and 2.6 hereof.

Commencement Date: 

The date that is three (3) days from the mutual execution and delivery of this
Lease.

Occupancy Date: 

The date on which Tenant occupies the Premises, or any portion thereof, for the
conduct of its business.

 

Rent Commencement
Date: 

January 1, 2012. See also Section 2.2 with respect to additional information
concerning the Rent Commencement Date.

Substantial Completion Date:

If Tenant performs the Tenant Work, then the “Substantial Completion Date” shall
be the date that Tenant substantially completes the Tenant Work in such a
fashion as to enable Tenant, upon furnishing, wiring and equipping the same, to
open for business in the normal course. If Landlord performs the Tenant Work,
then the “Substantial  Completion  Date” shall be the date that (i) Landlord
substantially completes the Tenant Work, except that in the event of any Tenant
Delays, the Substantial Completion Date shall be the date that Landlord would
have achieved substantial completion of the Tenant Work, but for such Tenant
Delays, and (ii) the Town of Brighton has issued such evidence as is customary
(e.g., inspection sign-off) to permit occupancy of the Premises, unless such
evidence is not available due to (a) any defect in the design of the Tenant
Work, (b) Tenant not having completed furnishing, wiring and equipping the same,
and/or (c) any other matter beyond the reasonable control of Landlord
(including, for example, delays in Town inspectors completing such inspections).
Landlord’s certificate of substantial completion shall be conclusive and binding
upon Tenant unless Tenant, within seven (7) days after Tenant receives such
certificate, gives written notice to Landlord setting forth with specificity
Tenant’s objections to such certificate. See also Section 3.2(B) with respect to
additional information concerning entry rights of Tenant prior to the
Substantial Completion Date.

Base Building Work: 

See Exhibit G. 

Contemplated Scope of Tenant Work: 

See Exhibit H. 

Tenant Work:

See Section 3.2.2.

Tenant Delays: 

See Section 3.2.2.

Tenant Work Election Date:

Within five (5) days of the mutual execution and delivery of this Lease.

Initial Plans Date: 

Within fourteen (14) days of the mutual execution and delivery of this Lease.

Final Plans Date: 

Within thirty (30) days of the mutual execution and delivery of this Lease.

Authorization to Proceed Date: 

Within thirty (30) days of the mutual execution and delivery of this Lease.

Annual Fixed Rent: 

As set forth below:

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Office Premises: 

 

 

 

 

Lease Year*

 

 

 

Annual Fixed Rent

 

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

 

January 1, 2012 – December 31, 2012*

 

 

$236,500.00

 

$19,708.33

 

$11.00

January 1, 2013 – December 31, 2013

 

 

$239,725.00

 

$19,977.08

 

$11.15

January 1, 2014 – December 31, 2014

 

 

$242,950.00

 

$20,245.83

 

$11.30

January 1, 2015 – December 31, 2015

 

 

$246,175.00

 

$20,514.58

 

$11.45

January 1, 2016 – December 31, 2016

 

 

$249,400.00

 

$20,783.33

 

$11.60

January 1, 2017 – June 30, 2017

 

$252,625.00**

 

$21,052.08

 

$11.75

 

 

 

 

 

 

 

 

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Warehouse Premises: 

 

 

 

 

 

Lease Year*

 

 

Annual Fixed Rent

 

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

 

 

January 1, 2012 – December 31, 2012*

 

$115,500.00

 

$9,625.00

 

$11.00

 

 

 

January 1, 2013 – December 31, 2013

 

$117,075.00

 

$9,756.25

 

$11.15

 

 

January 1, 2014 – December 31, 2014

 

$118,650.00

 

$9,887.50

 

$11.30

 

 

January 1, 2015 – February 28, 2015

 

$120,225.00**

 

$10,018.75

 

$11.45

 

 

 

*Waived Rent: Notwithstanding anything herein which may be construed to the
contrary, provided there is no monetary or material non-monetary Default of
Tenant then existing under the Lease during the first two (2) months of each of
the Original Office Premises Term and the Original Warehouse Premises Term (the
“Waiver Periods”), the Monthly Fixed Rent for both the Office Premises and the
Warehouse Premises is hereby waived by Landlord (the “Waived Rent”). The total
amount of Waived Rent is $58,666.66 ($39,416.66 with respect to the Office
Premises and $19,250.00 with respect to the Warehouse Premises). The foregoing
waivers shall not affect Tenant’s obligation to pay the Tenant’s Tax Obligation,
Tenant’s Operating Cost Obligation, and Tenant’s obligation to pay for utilities
(subject to Section 4.5 below) or any other charges payable by Tenant under the
Lease with respect to the Office Premises and Warehouse Premises.

 

**Annualized

Tenant’s Percentage: 

The ratio of Premises Rentable Area to one hundred percent (100%) of Building
Rentable Area, which ratio shall initially be deemed to be one hundred percent
(100%).

Permitted Uses: 

Office Premises: General and administrative office uses compatible with a
first-class office building, subject to the provisions of Subsection 6.1.2.

Warehouse Premises: Light manufacturing, assembly, and warehouse purposes,
subject to the provisions of Subsections 6.1.2, 6.1.4 and 6.2.8.

Security Deposit: 

None.

Commercial General Liability Insurance
Limits: 

$3,000,000 per occurrence (combined single limit) for property damage, bodily
and personal injury and death.

Original Address of Landlord: 

Hub Properties Trust

c/o Reit Management & Research LLC

1500 Market Street

Philadelphia, PA 19103

Attention: Vice President, Northeast Central Region

 

With a copy to:

 

Reit Management & Research LLC

Two Newton Place

255 Washington Street, Suite 300

Newton, MA 02458

Attention: Jennifer B. Clark

 

and

 

Hub Properties Trust

c/o Reit Management & Research LLC

One Lincoln Center

110 West Fayette Street, 11th Floor

Syracuse, New York 13202

Attention: Area Manager

 

Original Address of
Tenant: 

Performance Technologies, Incorporated

205 Indigo Creek Drive

Rochester, New York 14626

ATTN: Dorrance W. Lamb, Chief Financial Officer

 

After Tenant takes occupancy of the Property, the address shall then be:

 

Performance Technologies, Incorporated

140 Canal View Boulevard

Rochester, New York 14623

ATTN: Dorrance W. Lamb, Chief Financial Officer

 

With a copy to:

 

Harter Secrest & Emery LLP

1600 Bausch & Lomb Place

Rochester, New York 14604-2711

ATTN: William N. La Forte, Esq.

Address for Payment
of Rent: 

Hub Properties Trust

c/o Reit Management & Research LLC

P.O. Box 84-5008

Boston, MA 02284-5008

Guarantor:

None.

           

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1.2              EXHIBITS. 

The Exhibits listed below in this section are incorporated in this Lease by
reference and are to be construed as a part of this Lease.

EXHIBIT A.   Plan showing the Premises.

EXHIBIT B.   Rules and Regulations.

EXHIBIT C.   Confirmation of Lease Provisions.

EXHIBIT D.   Alterations Requirements.

EXHIBIT E.   Contractor’s Insurance Requirements.

EXHIBIT F.   Clerk’s Certificate.

EXHIBIT G.   Base Building Work

EXHIBIT H.   Contemplated Scope of Tenant Work

 

ARTICLE 2
PREMISES AND TERM

2.1              PREMISES 

.  Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
subject to and with the benefit of the terms, covenants, conditions and
provisions of this Lease, the Premises, excluding exterior faces of exterior
walls, and in the event the Premises are reduced to less than the entire
Building, also excluding the common lobbies, hallways, stairways, stairwells,
elevator shafts and other common areas, and the escalators, elevators, pipes,
ducts, conduits, wires and appurtenant fixtures and other common facilities
serving the common areas, the Premises and the premises of other tenants in the
Building.

Tenant shall have, as appurtenant to the Premises, rights to use, in common with
others (to the extent the Premises consist of less than the entire Building),
subject to reasonable rules of general applicability to tenants of the Building
from time to time made by Landlord of which Tenant is given notice: (a) the
common lobbies, hallways and stairways of the Building, (b) the common
escalators, elevators, pipes, ducts, conduits, wires and appurtenant fixtures
and other common facilities serving the Premises, (c) common walkways and
driveways (if any) necessary for access to the Building, and (d) if the Premises
include less than all of the rentable area of any floor of the Building, the
common toilets and other common facilities located on such floor.

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2.2              THE 205 INDIGO CREEK LEASE»

.  Landlord and Tenant hereby acknowledge that (a) Tenant is currently occupying
the entire building owned by Landlord at 205 Indigo Creek Drive, Rochester, New
York (the “205 Indigo Creek Premises”) under a lease with Landlord dated May 19,
2001, as amended by a First Amendment to Lease dated as of July 19, 2001 (as
amended, the “205 Indigo Creek Lease”) for a term expiring April 30, 2012, (b)
in order to accommodate Tenant’s wishes to relocate to the Building, Landlord
and Tenant have entered into that certain Termination Agreement of even date
herewith terminating the 205 Indigo Creek Lease effective as of the Termination
Date (as such term is defined therein), and (c) in consideration of relieving
Tenant of its obligation to make payments of Base Rent, real estate taxes, or
expenses with respect to the 205 Indigo Creek Premises from and after January 1,
2012, all to the extent and subject to the terms and conditions set forth in the
Termination Agreement, the Rent Commencement Date under this Lease shall be the
date set forth in Section 1.1 above regardless of whether the Landlord or Tenant
is performing the Tenant Work under this Lease. 

2.3              MEASUREMENT OF THE PREMISES

.  Landlord and Tenant agree that the Premises Rentable Area identified in
Section 1.1 is recited for Landlord’s administrative purposes only and that,
although the Annual Fixed Rent and Tenant’s Percentage have been determined by
reference to such square footage (regardless of the possibility that the actual
measurement of the Premises may be more or less than the number identified,
irrespective of the measurement method used), Annual Fixed Rent and Tenant’s
Percentage shall not be changed except as expressly provided in this Lease.

2.4              TERM 

.  The Term of this Lease for both the Office Premises and the Warehouse
Premises shall be for a period beginning on the Rent Commencement Date (as
defined in Section 3.1) and continuing for the respective Original Office
Premises Term and the Original Warehouse Premises Term, and any extension of the
applicable Term hereof in accordance with the provision of this Lease, unless
sooner terminated as hereinafter provided.  When the dates of the beginning and
end of the Original Office Premises Term and the Original Warehouse Premises
Term have been determined, such dates shall be evidenced by documents,
substantially in the form attached hereto as Exhibit C, executed by Landlord and
Tenant and delivered each to the other, but the failure of Landlord and Tenant
to execute or deliver such documents shall have no effect upon such dates.  The
Original Office Premises Term and the Original Warehouse Premises Term and any
extension of same in accordance with the provisions of this Lease are
hereinafter referred to as the “Office Premises Term” and the “Warehouse
Premises Term” of this Lease, respectively (together, the “Term”). 

2.5              EXTENSION OPTIONS—OFFICE PREMISES

.  So long as this Lease is still in full force and effect, and subject to the
Office Extension Conditions (as hereinafter defined), which Landlord may waive,
in its sole and absolute discretion, at any time, but only by notice to Tenant,
Tenant shall have the right to extend the Office Premises Term for two (2)
additional periods (each, an “Office Premises Extended Term”) of thirty-six (36)
months each (the “First Office Premises Extended Term” and the “Second Office
Premises Extended Term”,   respectively).  Each Office Premises Extended Term
shall commence on the day succeeding the expiration of the Original Office
Premises Term or the preceding Office Premises Extended Term, as the case may
be, and shall end on the last day of the thirty-sixth (36th) calendar month
thereafter.  All of the terms, covenants and provisions of this Lease applicable
immediately prior to the expiration of the then current Term shall apply to each
Office Premises Extended Term except that the Annual Fixed Rent for each Office
Premises Extended Term shall be as set forth below.

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FIRST OFFICE PREMISES EXTENDED TERM: 

Lease Year

Annual Fixed Rent

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

 

July 1, 2017 – December 31, 2017

 

 

$252,625.00*

 

$21,052.08

 

$11.75

January 1, 2018 – December 31, 2018

 

 

$255,850.00

 

$21,320.83

 

$11.90

January 1, 2019 – December 31, 2019

 

 

$259,075.00

 

$21,589.58

 

$12.05

January 1, 2020 – June 30, 2020

 

$262,300.00*

 

$21,858.33

 

$12.20

 

Second Office Premises Extended Term: 

 

Lease Year

Annual Fixed Rent

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

 

July 1, 2020 – December 31, 2020

 

$262,300.00*

 

$21,858.33

 

$12.20

January 1, 2021 – December 31, 2021

 

 

$265,525.00

 

$22,127.08

 

$12.35

January 1, 2022 – December 31, 2022

 

 

$268,750.00

 

$22,395.83

 

$12.50

January 1, 2023 – June 30, 2023

 

 

$271,975.00*

 

$22,664.58

 

$12.65

 

*Annualized

 

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If Tenant shall elect to exercise any of the aforesaid options, it shall do so
by giving Landlord notice (an “Office Extension Election Notice”) of its
election not later than twelve (12) months prior to the expiration of the then
current Office Premises Term.  If Tenant fails to give any such notice to
Landlord, the Office Premises Term shall automatically terminate no later than
the end of the Office Premises Term then in effect, and Tenant shall have no
further option to extend the Office Premises Term, it being agreed that time is
of the essence with respect to the giving of any such notice.  If Tenant shall
extend the Office Premises Term hereof pursuant to the provisions of this
Section 2.5, such extension shall (subject to satisfaction of the Office
Extension Conditions, unless waived by Landlord) be automatically effected
without the execution of any additional documents, but Tenant shall, at
Landlord’s request, execute an agreement confirming such applicable Office
Premises Extended Term.  The “Office Extension Conditions” are that, as of the
date of the applicable Office Extension Election Notice there shall exist no
Default of Tenant (i.e,  beyond any applicable cure period), and Performance
Technologies, Incorporated, itself (or any successor by Merger, or any Affiliate
as defined in Subsection 6.2.1), shall actually occupy the entire Office
Premises.

2.6              EXTENSION OPTIONS—WAREHOUSE PREMISES

.  So long as this Lease is still in full force and effect, and subject to the
Warehouse Extension Conditions (as hereinafter defined), which Landlord may
waive, in its sole and absolute discretion, at any time, but only by notice to
Tenant, Tenant shall have the right (each, a “Warehouse Premises Extension
Option”) to extend the Warehouse Premises Term for two (2) additional periods
(each, a “Warehouse Premises Extended Term”) of fourteen (14) months each (the
“First Warehouse Premises Extended Term” and the “Second Warehouse Premises
Extended Term”, respectively).  Each Warehouse Premises Extended Term shall
commence on the day succeeding the expiration of the Original Warehouse Premises
Term or the preceding Warehouse Premises Extended Term, as the case may be, and
shall end on the last day of the fourteenth (14th) calendar month thereafter
(each, a “Warehouse Premises Extended Term Expiration Date”).  All of the terms,
covenants and provisions of this Lease applicable immediately prior to the
expiration of the then current Warehouse Premises Term shall apply to each
Warehouse Premises Extended Term except that the Annual Fixed Rent for each
Warehouse Premises Extended Term shall be as set forth below.

First Warehouse Premises Extended Term: 

Lease Year

Annual Fixed Rent

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

March 1, 2015 – December 31, 2015

 

 

$120,225.00*

 

$10,018.75

 

$11.45

January 1, 2016 – April 30, 2016

 

$121,800.00*

 

$10,150.00

 

$11.60

         

 

 

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Second Warehouse Premises Extended Term: 

Lease Year

Annual Fixed Rent

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

May 1, 2016 – December 31, 2016

 

 

$121,800.00*

 

$10,150.00

 

$11.60

January 1, 2017 – June 30, 2017

 

$123,375.00*

 

$10,281.25

 

$11.75

             

            *Annualized

If Tenant shall elect to exercise any of the aforesaid options, it shall do so
by giving Landlord notice (an “Warehouse Extension Election Notice”) of its
election not later than six (6) months prior to the expiration of the then
current Warehouse Premises Term.  If Tenant fails to give any such notice to
Landlord, the Warehouse Premises Term shall automatically terminate no later
than the end of the Warehouse Premises Term then in effect, and Tenant shall
have no further option to extend the Warehouse Premises, it being agreed that
time is of the essence with respect to the giving of any such notice.  If Tenant
shall extend the Warehouse Premises Term hereof pursuant to the provisions of
this Section 2.6, such extension shall (subject to satisfaction of the Warehouse
Extension Conditions, unless waived by Landlord) be automatically effected
without the execution of any additional documents, but Tenant shall, at
Landlord’s request, execute an agreement confirming such applicable Warehouse
Premises Extended Term.  The “Warehouse Extension Conditions” are that, as of
the date of the applicable Warehouse Extension Election Notice there shall exist
no Default of Tenant (i.e., beyond any applicable cure period), and Performance
Technologies, Incorporated, itself (or any successor by Merger, or any Affiliate
as defined in Subsection 6.2.1), shall actually occupy the entire Warehouse
Premises.

2.7              CONTINGENT EXTENSION OPTIONS—WAREHOUSE PREMISES

.  In the event that Tenant has exercised both of its options set forth in
Section 2.6 above thereby extending the Warehouse Premises Term to be
coterminous with the initial Office Premises Term, then so long as this Lease is
still in full force and effect, and subject to the Additional Warehouse
Extension Conditions (as hereinafter defined), which Landlord may waive, in its
sole and absolute discretion, at any time, but only by notice to Tenant, Tenant
shall have the right (each a “Conditional Warehouse Premises Extension Option”)
to extend the Warehouse Premises Term of this Lease for two (2) additional
periods (each, an “Additional Warehouse Premises Extended Term”) of thirty-six
(36) months each (the “First Additional Warehouse Premises Extended Term” and
the “Second Warehouse Premises Extended Term”, respectively).  Each Additional
Warehouse Premises Extended Term shall commence on the day succeeding the
expiration of the preceding Warehouse Premises Extended Term and Additional
Warehouse Premises Extended Term, as applicable, and shall end on the last day
of the thirty-sixth (36th) calendar month thereafter.  All of the terms,
covenants and provisions of this Lease applicable immediately prior to the
expiration of the then current Warehouse Premises Term shall apply to each
Additional Warehouse Premises Extended Term except that the Annual Fixed Rent
for each Additional Warehouse Premises Extended Term shall be as set forth
below.

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First Additional Warehouse Premises Extended Term: 

Lease Year

Annual Fixed Rent

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

 

July 1, 2017 – December 31, 2017

 

 

$123,375.00*

 

$10,281.25

 

$11.75

January 1, 2018- December 31, 2018

 

 

$124,950.00

 

$10,412.50

 

$11.90

January 1, 2019 – December 31, 2019

 

$126,525.00

 

$10,543.75

 

 

$12.05

January 1, 2020 –

June 30, 2020

 

$128,100.00*

 

$10,675.00

 

$12.20

 

Second Additional Warehouse Premises Extended Term: 

 

Lease Year

Annual Fixed Rent

Monthly Fixed Rent

Per-Rentable-Square-Foot Rent

 

July 1, 2020 – December 31, 2020

 

$128,100.00*

 

$10,675.00

 

$12.20

January 1, 2021 – December 31, 2021

 

 

$129,675.00

 

$10,806.25

 

$12.35

January 1, 2022 – December 31, 2022

 

$131,250.00

$10,937.50

$12.50

January 1, 2023 – June 30, 2023

 

$132,825.00*

 

$11,068.75

 

$12.65

            *Annualized

If Tenant shall elect to exercise any of the aforesaid options, it shall do so
by giving Landlord notice (an “Additional Warehouse Premises Election Notice”)
of its election not later than twelve (12) months prior to the expiration of the
then current Warehouse Premises Term.  If Tenant fails to give any such notice
to Landlord, the Warehouse Premises Term shall automatically terminate no later
than the end of the then applicable Warehouse Premise Term in effect, and Tenant
shall have no further option to extend the Warehouse Premises Term, it being
agreed that time is of the essence with respect to the giving of any such
notice.  If Tenant shall extend the Warehouse Premises Term hereof pursuant to
the provisions of this Section 2.7, such extension shall (subject to
satisfaction of the Additional Warehouse Extension Conditions, unless waived by
Landlord) be automatically effected without the execution of any additional
documents, but Tenant shall, at Landlord’s request, execute an agreement
confirming such applicable Additional Warehouse Premises Extended Term.  The
“Additional Warehouse Extension Conditions” are that, as of the date of the
applicable Additional Warehouse Premises Extension Election Notice there shall
exist no Default of Tenant beyond any applicable cure period, Tenant shall have
simultaneously exercised its option to extend the Office Premises Term pursuant
to Section 2.5 above, and Performance Technologies, Incorporated, itself (or any
successor by Merger, or any Affiliate as defined in Subsection 6.2.1), shall
actually occupy the entire Warehouse Premises.

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2.8              EFFECT OF TENANT’S FAILURE TO EXTEND TERM WITH RESPECT TO
WAREHOUSE PREMISES»

.  If the Warehouse Premises Term expires because Tenant has failed timely to
exercise one of its Warehouse Premises Extension Options or one of its
Conditional Warehouse Premises Extension Options, and the Term of the Lease with
respect to the Office Premises thereafter continues, Landlord shall, at
Landlord’s cost: (i) install a demising wall separating the Warehouse Premises
from the Office Premises in the location shown on Exhibit A, and (ii) install a
meter, or check meter, to separately measure the consumption of electricity in
the Office Premises.  Thereafter, Tenant’s obligation to pay for electric
current shall be limited solely to the cost of electric current consumed in the
Office Premises, the parties hereby agreeing that, if: (i) the Office Premises
are separately metered, Tenant shall pay for the entire cost of electric current
consumed in the Office Premises during the remainder of the Office Premises
Term, as the same may be extended, to the utility company providing such service
on or before the dates when such amounts are due, and (ii) if the Office
Premises are check metered, Tenant shall pay to Landlord, as additional rent,
for the entire cost of electric current, on an estimated monthly basis, on the
first day of each month in advance, as reasonably estimated by Landlord, and, on
at least a semi-annual basis, such estimated monthly payments shall be adjusted
between Landlord and Tenant based upon the actual amount of electric current
consumed in the Office Premises as measured by such check meter, with Tenant
paying any underpayment to Landlord, within thirty (30) days of billing, or
Landlord either, at Landlord’s election, crediting any overpayment against
overpayment against Tenant’s subsequent obligations on account of electricity or
reimbursing Tenant for such overpayment, less any amounts then due from Tenant
to Landlord.

ARTICLE 3
COMMENCEMENT AND CONDITION

3.1              COMMENCEMENT DATE

.  The Commencement Date shall be the date set forth in Section 1.1.

3.2              CONDITION OF PREMISES/LANDLORD’S CONTRIBUTION. 

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            3.2.1    As-Is Condition/ Base Building Work

.  Notwithstanding anything to the contrary in this Lease contained, except for
the Base Building Work and, if Tenant elects, in accordance with Section 3.2.2,
that Landlord perform the Tenant Work, Tenant shall take the Premises “as-is”,
in the condition in which the Premises are in as of the Commencement Date,
without any obligation on the part of Landlord to prepare or construct the
Premises for Tenant’s occupancy, except as expressly set forth in this Lease,
and without any warranty or representation by Landlord as to the condition of
the Premises or the Building.

Landlord shall, at its sole cost and expense, perform the Base Building Work in
a good and workmanlike manner.  Landlord shall exercise all commercially
reasonable efforts to complete the Base Building Work on or before the date that
is the sixtieth (60th) day from the mutual execution and delivery of this Lease
except for items of work (and, if applicable, adjustment of equipment and
fixtures) which can be completed after occupancy has been taken without causing
undue interference with Tenant’s use of the Premises (i.e., so-called “punch
list” items).  Landlord shall complete within sixty (60) days all “punch list”
items, except for long lead-time items with respect to which Landlord shall
complete as soon as conditions permit, and Tenant shall afford Landlord access
to the Premises for such purposes.

            3.2.2    Tenant Work

. At Tenant’s election (which election shall be made by Tenant giving written
notice (“Tenant Work Election Notice”) to Landlord on or before the Tenant Work
Election Date), either: (i) Tenant shall perform the leasehold improvements in
both the Office Premises and the Warehouse Premises in accordance with the plans
and specifications (as approved by Landlord, “Tenant’s Plans”), which shall be
consistent with the Contemplated Tenant Work described on Exhibit H, in
accordance with Landlord’s plan submission standards set forth in Exhibit D and
shall be submitted to Landlord for its approval (“Tenant Work”), or (ii)
Landlord shall perform the Tenant Work.  If Tenant does not timely give Landlord
a Tenant Work Election Notice, then Tenant shall be deemed to have elected that
Tenant perform the Tenant Work.  Tenant shall submit initial plans and
specifications with respect to the Tenant Work on or before the Initial Plans
Date and the parties shall use reasonable efforts to finalize the same within
fourteen (14) days thereafter.  All changes to Tenant’s final approved plans
shall be subject to Landlord’s prior written approval.  Tenant shall submit the
final approved Tenant’s Plans to Landlord on or before the Final Plans Date and,
if Landlord performs the Tenant Work, Tenant shall give Landlord written
authorization to proceed with the Tenant Work on or before the Authorization to
Proceed Date.  Any breach by Tenant in its obligations under the immediately
preceding sentence shall be deemed to be a Tenant Delay. 

If Tenant performs the Tenant Work, the Tenant Work shall be performed in
accordance with this Lease, including, without limitation, Subsections 6.2.4 and
6.2.5 hereof.  Except for Landlord’s Contribution, Tenant Work shall be at
Tenant’s sole cost and expense.  If Tenant elects to have Landlord perform
Tenant Work, Tenant shall pay Landlord a construction management fee equal to
two percent (2%) of the cost of Tenant Work (which amount shall be deducted from
Landlord’s Contribution).  In addition, if Tenant elects to have Landlord
perform the Tenant Work and provided that there are no Tenant Delays, as
hereinafter defined, Tenant shall not be responsible for the payment of any
holdover rent in the 205 Indigo Creek Premises unless Tenant fails to vacate the
205 Indigo Creek Premises (a) that is occupied for office use on or before the
date that is ten (10) days following the Substantial Completion Date, and (b) in
its entirety (including those portions that are occupied for light
manufacturing, assembly and warehouse uses) on or before the date that is twenty
(20) days following the Substantial Completion Date.  If, however, Tenant elects
to perform the Tenant Work and the Tenant Work is not completed in time for
Tenant to vacate the 205 Indigo Creek Premises on or before the date that is the
earlier to occur of (a) (i) with respect to those portions of the Premises that
are occupied for office use, ten (10) days following the Substantial Completion
Date (as such term is defined in the New Lease), and (ii) with respect to the
entirety of the Premises (including those portions that are occupied for light
manufacturing, assembly and warehouse uses) on or before the date that is twenty
(20) days following the Substantial Completion Date; and (b) one hundred fifty
(150) days after the Commencement Date, then Tenant shall be obligated to pay
the Holdover Rent (as such term is defined in the Termination Agreement),
subject to and in accordance with the terms of the Termination Agreement.  If
either Tenant or Landlord performs the Tenant Work and the Substantial
Completion Date occurs at any time on or prior to March 31, 2012 (the “Blackout 
Period”), then, the Substantial Completion Date shall be postponed until the
first day following the expiration of the Blackout Period but, if the Tenant
shall accept possession of the Premises during the Blackout Period, the date of
such acceptance shall be the Substantial Completion Date.  For purposes hereof,
“Tenant Delays” are defined as any delay which is (i) due to special work,
changes, alterations, additions or so-called “long-lead” items required or made
by Tenant or as part of the Tenant Work, (ii) due to any work beyond the
Contemplated Scope of Tenant Work, (iii) caused in whole or in part by Tenant
through the delay of Tenant in supplying information, approving plans,
specifications or estimates, giving authorizations or otherwise, or (iv) caused
in whole or in part by delay and/or default on the part of Tenant or its
contractors or vendors including, without limitation, the utility companies and
other entities furnishing communications, data processing or other service or
equipment. 

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If Tenant elects to have Landlord perform the Tenant Work, and provided there
are no Tenant Delays, promptly following the approval of Tenant’s Plans and
Tenant’s issuance of its authorization to proceed, Landlord shall exercise all
reasonable efforts to complete the Tenant Work, but Tenant shall have no claim
against Landlord for failure so to complete the Tenant Work, and in light of
Tenant’s right to continue to occupy the 205 Indigo Creek Premises, Tenant’s
obligations under this Lease, including without limitation, the obligation to
pay Rent as provided for herein, shall remain in full force and effect and
without diminishment, notwithstanding that the Substantial Completion Date has
not yet occurred.  Tenant agrees that Landlord may make any changes in the
Tenant Work from that shown on Tenant’s Plans, the necessity or desirability of
which becomes apparent following approval of Tenant’s Plans, upon prior written
notice to Tenant for nonsubstantial changes and with the approval of Tenant
(which approval shall not be unreasonably withheld or delayed) for substantial
changes.

            3.2.3    Landlord’s Contribution and Cost of Tenant Work

.  Landlord shall, in the manner hereinafter set forth, provide Tenant with an
allowance (“Landlord’s Contribution”) of up to a total of Six Hundred Thirty
Thousand and 00/100 Dollars ($630,000.00) towards the cost of leasehold
improvements related to the Tenant Work (collectively “Permitted Costs”), which
cost may include: (i) the cost of demolition and all such leasehold improvements
(“Hard Costs”),  and (ii) the following soft  costs (“Soft Costs”): the cost of
construction management fees, wiring and telecommunications installation,
signage and moving costs.  Tenant shall, prior to submitting any Requisition to
Landlord, submit to Landlord the budget (“Tenant Work Budget”) for all costs in
connection with the Tenant Work, except that, if Landlord performs the Tenant
Work, Landlord shall provide the budget amount for Hard Costs.  Tenant (and
Landlord, if Landlord is performing the Tenant Work) shall update the Tenant
Work Budget once per month. 

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            A.        If Tenant Performs Tenant Work.  If Tenant performs the
Tenant Work, then the provisions of this Section A shall apply.   Provided that
there is no Default of Tenant under the Lease at the time that Tenant submits
any Requisition (as hereinafter defined) on account of Landlord’s Contribution,
Landlord shall pay the cost of the work shown on each Requisition submitted by
Tenant to Landlord within thirty (30) days of submission thereof by Tenant to
Landlord.  For the purposes hereof, a “Requisition” shall mean written
documentation (including, without limitation, invoices from Tenant’s contractor,
written lien waivers and such other documentation as Landlord may reasonably
request) showing in reasonable detail the costs of the improvements installed by
Tenant to date in the Premises.  To the extent Landlord has not made payment
directly to Tenant’s contractor, each Requisition shall be accompanied by
evidence reasonably satisfactory to Landlord that all work covered by previous
Requisitions has been fully paid by Tenant.  Landlord shall have the right, upon
reasonable advance notice to Tenant, to inspect Tenant’s books and records
relating to each Requisition in order to verify the amount thereof.  Tenant
shall submit Requisition(s) no more often than monthly.  If requested by Tenant
at the time of Tenant’s submission of such Requisition, Landlord shall make such
payment directly to Tenant’s contractor.  If Landlord declines to fund any
Requisition on the basis that there is a Default of Tenant under the Lease,
provided that this Lease is in full force and effect and Tenant cures such
Default in accordance with the terms and conditions of this Lease, then, subject
to the provisions set forth in this Subsection 3.2.3, Tenant shall have the
right to resubmit such declined Requisition, and Landlord shall pay any amounts
properly due under such resubmitted Requisition.  Each Tenant Requisition shall
be accompanied by the following: (i) a detailed breakdown of the costs of Tenant
Work, (ii) a copy of each Application for Payment (substantially on the standard
AIA form) from Tenant’s contractor for all contractor charges included in the
Requisition, (iii) copies of invoices for any architectural fees and other costs
not covered by a contractor’s Application for Payment that are included in the
Tenant’s Requisition, (iv) a certification by an appropriate officer of Tenant
or by Tenant’s architect that all of the construction work to be paid for with
Landlord’s Contribution has been completed in a good and workmanlike manner, in
accordance with Tenant’s Plans, (v) executed waivers of mechanic’s or material
supplier’s liens (in such form as Landlord shall reasonably require) waiving,
releasing and relinquishing all liens, claims and rights to lien under
applicable laws on account of any labor, materials and/or equipment furnished by
any party through the date of Tenant’s Requisition (provided that any such
waiver may be conditioned upon receipt of the amount requested for such party in
the Tenant’s Requisition), and (vi) a certification by an appropriate officer of
Tenant that Tenant has made (or upon receipt of the amount requested in the
Tenant’s Requisition shall make) full payment for all of the work and other
costs of Tenant Work covered by the Requisition.  Upon the earlier to occur of
the date that is (A) fifteen (15) days following Substantial Completion (as
hereinafter defined), or (B) the date of submission of  a Requisition for the
final ten percent (10%) of Landlord’s Contribution (or any portion thereof) (the
“Final Requisition”), in addition to delivering the documentation required in
subclauses (i) through (vi) above, such Final Requisition shall also be
accompanied by all items required to be delivered by Tenant pursuant to Exhibit
D, Section H, of the Lease.  For the purposes of this Subsection 3.2.3
“Substantial Completion” shall mean completed in such a fashion as to enable
Tenant, upon furnishing the same, to open for business in the normal course.

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            Notwithstanding anything to the contrary herein contained:

(I)                 EXCEPT WITH RESPECT TO WORK AND/OR MATERIALS PREVIOUSLY PAID
FOR BY TENANT, AS EVIDENCED BY PAID INVOICES AND WRITTEN LIEN WAIVERS PROVIDED
TO LANDLORD, LANDLORD SHALL HAVE THE RIGHT WITH RESPECT TO ANY TENANT CONTRACTOR
OR VENDOR THAT HAS FILED A LIEN AGAINST THE PROPERTY FOR WORK PERFORMED, OR
CLAIMED TO BE PERFORMED, WHICH HAS NOT BEEN DISCHARGED OR BONDED OVER, TO HAVE
LANDLORD’S CONTRIBUTION PAID TO BOTH TENANT AND SUCH CONTRACTOR OR VENDOR
JOINTLY, OR DIRECTLY TO SUCH CONTRACTOR OR VENDOR.

(II)               LANDLORD SHALL HAVE NO OBLIGATION TO PAY LANDLORD’S
CONTRIBUTION IN RESPECT OF ANY REQUISITION SUBMITTED AFTER THE DATE THAT IS
TWELVE (12) MONTHS AFTER THE RENT COMMENCEMENT DATE.

(III)             TENANT SHALL NOT BE ENTITLED TO ANY UNUSED PORTION OF
LANDLORD’S CONTRIBUTION.

(IV)             IF THE COST OF TENANT WORK EXCEEDS LANDLORD’S CONTRIBUTION,
TENANT SHALL BE FIRST ENTITLED TO LANDLORD’S CONTRIBUTION IN ACCORDANCE WITH THE
TERMS HEREOF AND LANDLORD’S CONTRIBUTION SHALL BE DISBURSED FIRST BEFORE TENANT
IS OBLIGATED TO PAY ANY SUCH EXCESS COST.  LANDLORD SHALL HAVE NO OBLIGATION TO
PAY LANDLORD’S CONTRIBUTION IN RESPECT OF ANY REQUISITION SUBMITTED AFTER THE
DATE THAT IS TWELVE (12) MONTHS AFTER THE RENT COMMENCEMENT DATE.  TENANT SHALL
NOT BE ENTITLED TO ANY UNUSED PORTION OF LANDLORD’S CONTRIBUTION,

B.        If Landlord Performs the Tenant Work.  If Landlord performs the Tenant
Work, then the following provisions of this Section B shall apply.  Tenant shall
have the right to submit Requisitions to Landlord for reimbursement of Soft
Costs in accordance with, and subject to, the provisions of Section A above
(including, without limitation, clause (iv).  To the extent that the cost of the
Tenant Work (including any Soft Costs paid by Landlord to Tenant, as aforesaid)
exceeds Landlord’s Contribution, Tenant shall, as additional rent, pay such
excess costs incurred by Landlord within thirty (30) days of billing by Landlord
to Tenant, from time to time. 

Notwithstanding anything to the contrary set forth herein (including that the
Commencement Date may have occurred), if Tenant elects to have Landlord perform
the Tenant Work, then Tenant shall be permitted access to the Premises prior to
the Substantial Completion Date but only to the extent necessary to install
communications wiring, fixtures, furniture and other equipment or for such other
activities as Landlord may reasonably approve; provided, however, that any such
early entry, installations, and/or activities of the Tenant shall not interfere
with construction work of the Landlord.

3.3              LANDLORD’S ADDITIONAL CONTRIBUTION; CONSTRUCTION RENT. 

(A)                WITHOUT LIMITING THE FOREGOING, TENANT SHALL HAVE THE RIGHT,
AT TENANT’S ELECTION (WHICH ELECTION TENANT MAY EXERCISE BY GIVING LANDLORD
WRITTEN NOTICE ON OR BEFORE THE DATE THAT IS NINETY (90) DAYS FROM THE DATE OF
THIS LEASE, TIME BEING OF THE ESSENCE), TO REQUIRE LANDLORD TO PROVIDE AN
ADDITIONAL CONTRIBUTION (“LANDLORD’S ADDITIONAL CONTRIBUTION”) OF UP

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TO THREE HUNDRED TWENTY THOUSAND AND 00/100 DOLLARS ($320,000.00).  IF TENANT
ELECTS TO USE ANY PORTION OF LANDLORD’S ADDITIONAL CONTRIBUTION, LANDLORD’S
ADDITIONAL CONTRIBUTION SHALL BE PROVIDED IN THE SAME MANNER AND SUBJECT TO ALL
OF THE SAME TERMS AND CONDITIONS AS ARE APPLICABLE TO LANDLORD’S CONTRIBUTION
(AND LANDLORD’S ADDITIONAL CONTRIBUTION SHALL BE DEEMED TO BE A PART OF
LANDLORD’S CONTRIBUTION FOR ALL PURPOSES OF SECTION 3.2), EXCEPT THAT TENANT
SHALL PAY CONSTRUCTION RENT IN ACCORDANCE WITH THIS SECTION 3.3. 

(B)               IF TENANT ELECTS THAT LANDLORD PROVIDE LANDLORD’S ADDITIONAL
CONTRIBUTION TO TENANT, THEN TENANT SHALL PAY TO LANDLORD, AS ADDITIONAL RENT,
CONSTRUCTION RENT, AS HEREINAFTER DEFINED.  “CONSTRUCTION RENT” SHALL BE PAYABLE
BY TENANT TO LANDLORD COMMENCING AS OF THE FIRST DATE LANDLORD PROVIDES ANY
PORTION OF LANDLORD’S ADDITIONAL CONTRIBUTION, AND CONTINUING ON THE FIRST DAY
OF EACH MONTH THEREAFTER THROUGHOUT THE TERM OF THE LEASE.  CONSTRUCTION RENT
SHALL BE BASED UPON THE AMOUNT OF LANDLORD’S ADDITIONAL CONTRIBUTION SO
PROVIDED.  TENANT'S MONTHLY PAYMENTS OF CONSTRUCTION RENT SHALL BE EQUAL TO THE
AMOUNT WHICH WOULD BE NECESSARY TO REPAY A LOAN IN THE AMOUNT OF LANDLORD’S
ADDITIONAL CONTRIBUTION (OR SO MUCH THEREOF AS HAS BEEN DISBURSED), IN EQUAL
MONTHLY PAYMENTS OF PRINCIPAL AND INTEREST, ON A DIRECT REDUCTION BASIS OVER THE
SIXTY-SIX-(66)-MONTH TERM OF THE LEASE WITH RESPECT TO THE OFFICE PREMISES WITH
INTEREST AT THE RATE OF TEN (10%) PERCENT PER ANNUM.

(C)                FOR ALL PURPOSES OF THE LEASE, CONSTRUCTION RENT SHALL BE
TREATED AS ADDITIONAL RENT AND SHALL BE STATED AS ADDITIONAL RENT ON ANY INVOICE
THEREFOR DELIVERED BY LANDLORD TO TENANT.  MONTHLY PAYMENTS OF CONSTRUCTION RENT
SHALL BE PAYABLE AT THE SAME TIME AND IN THE SAME MANNER AS FIXED MONTHLY RENT
IS PAYABLE UNDER THE LEASE.  CONSTRUCTION RENT SHALL NOT BE ABATED OR REDUCED
FOR ANY REASON WHATSOEVER (INCLUDING, WITHOUT LIMITATION, TERMINATION OF THE
LEASE).  SINCE THE PAYMENT OF CONSTRUCTION RENT REPRESENTS A REIMBURSEMENT TO
LANDLORD OF COSTS WHICH LANDLORD WILL INCUR IN CONNECTION WITH TENANT’S
CONSTRUCTION OF THE PREMISES, IF THERE IS ANY DEFAULT OF TENANT (BEYOND THE
EXPIRATION OF ANY APPLICABLE GRACE PERIODS) UNDER THE LEASE (INCLUDING, WITHOUT
LIMITATION, ITS OBLIGATION TO PAY CONSTRUCTION RENT) OR IF THE TERM OF THE LEASE
IS TERMINATED FOR ANY REASON WHATSOEVER PRIOR TO THE EXPIRATION OF THE TERM OF
THE LEASE, THEN TENANT SHALL PAY TO LANDLORD, IMMEDIATELY UPON DEMAND, THE
UNAMORTIZED BALANCE OF LANDLORD’S ADDITIONAL CONTRIBUTION.  TENANT’S OBLIGATION
TO PAY THE UNAMORTIZED BALANCE OF LANDLORD’S ADDITIONAL CONTRIBUTION SHALL BE IN
ADDITION TO ALL OTHER RIGHTS AND REMEDIES WHICH LANDLORD HAS BASED UPON ANY
DEFAULT OF TENANT UNDER THE LEASE, AND TENANT SHALL NOT BE ENTITLED TO ANY
CREDIT OR REDUCTION IN SUCH PAYMENT BASED UPON AMOUNTS COLLECTED BY LANDLORD
FROM RELETTING THE PREMISES AFTER THE DEFAULT OF TENANT. 

3.4              CONSTRUCTION REPRESENTATIVES

.  Both Landlord and Tenant shall appoint one individual as its “Construction
Representative” who is authorized to act on its behalf in connection with any
matters arising pursuant to this Article 3.  The Construction Representative may
be changed from time to time by notice hereunder from the then current
Construction Representative to the other party’s Construction Representative or
by notice from Landlord or Tenant pursuant to Section 10.1.  The initial
Construction Representatives shall be Kim Reed (Landlord) and Dorrance W. Lamb
(Tenant).  Notwithstanding Section 10.1, any notices or other communication
under this Article 3 may be made by letter or other writing sent by U.S. mail,
facsimile or email, provided the communication is made by one party’s
Construction Representative to the other party’s Construction Representative.

 

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ARTICLE 4
RENT, ADDITIONAL RENT, INSURANCE AND OTHER CHARGES

4.1              THE ANNUAL FIXED RENT

.  Commencing on the Rent Commencement Date, Tenant shall pay Annual Fixed Rent
to Landlord, or as otherwise directed by Landlord, without offset, abatement
(except as provided in Article 7), deduction or demand.  Annual Fixed Rent shall
be payable in equal monthly installments, in advance, on the first day of each
and every calendar month during the Term of this Lease, at the Address for
Payment of Rent or at such other place as Landlord shall from time to time
designate by notice, by check drawn on a domestic bank.

Annual Fixed Rent for any partial month shall be prorated on a daily basis
(based on a three-hundred-sixty-five-(365)-day year), and if Annual Fixed Rent
commences on a day other than the first day of a calendar month, the first
payment which Tenant shall make to Landlord shall be payable on the date Annual
Fixed Rent commences and shall be equal to such pro-rated amount plus the
installment of Annual Fixed Rent for the succeeding calendar month.

4.2              ADDITIONAL RENT

.  Tenant covenants and agrees to pay Tenant’s Percentage of Taxes and Operating
Costs as provided in Subsections 4.2.1 and 4.2.2 and all other charges and
amounts payable by or due from Tenant to Landlord (all such amounts referred to
in this sentence being “Additional Rent”).

4.2.1        REAL ESTATE TAXES

.  Commencing as of the Rent Commencement Date and continuing thereafter
throughout the Term, Tenant shall pay to Landlord, as Additional Rent, Tenant’s
Percentage of Taxes (as hereinafter defined) assessed against the Property (or
estimated to be due by governmental authority) for any calendar year (a “Tax
Year”) during the Term of this Lease (Tenant’s Percentage of Taxes for each Tax
Year being “Tenant’s Tax Obligation”). Tenant shall pay to Landlord, as
Additional Rent on the first day of each calendar month during the Term but
otherwise in the manner provided for the payment of Annual Fixed Rent, estimated
payments on account of the Tenant’s Tax Obligation, such monthly amounts to be
sufficient to provide Landlord by the time Tax payments are due or are to be
made by Landlord a sum equal to Tenant’s Tax Obligation for the then current Tax
Year, as reasonably estimated by Landlord from time to time.  Within a
reasonable period of time after the end of each Tax Year (but not to exceed one
hundred twenty (120) days after the end of the Term, Landlord shall give Tenant
a notice setting forth the amount of Taxes for the preceding Tax Year and a
computation of Tenant’s Tax Obligation for such Tax Year.  If the total of
Tenant’s monthly remittances on account of Tenant’s Tax Obligation for any Tax
Year is greater than Tenant’s Tax Obligation for such Tax Year, Landlord shall
credit such overpayment against Tenant’s subsequent obligations on account of
Taxes (or promptly refund such overpayment if the Term of this Lease has ended
and Tenant has no further obligations to Landlord); if the total of such
remittances is less than the Tenant’s Tax Obligation for such Tax Year, Tenant
shall pay the difference to Landlord within ten (10) days after being so
notified by Landlord.

If, after Tenant shall have made all payments due to Landlord pursuant to this
Subsection 4.2.1, Landlord shall receive a refund of any portion of Taxes as a
result of an abatement of such Taxes by legal proceedings, settlement or
otherwise (without either party having any obligation to undertake any such
proceedings), Landlord shall pay or credit to Tenant Tenant’s Percentage of that
percentage of the refund (after first deducting any expenses, including
reasonable attorneys’, consultants’ and appraisers’ fees, incurred in connection
with obtaining any such refund) which equals the percentage of the applicable
Tax Year included in the Term hereof, provided however, in no event shall Tenant
be entitled to receive more than the sum of payments actually made by Tenant on
account of Taxes with respect to such Tax Year.

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In the event that the Rent Commencement Date shall occur or the Term of this
Lease shall expire or be terminated during any Tax Year, or should the Tax Year
or period of assessment of real estate taxes be changed or be more or less than
one (1) year, or should Tenant’s Percentage be modified during any Tax Year due
to a change in the rentable area of the Building and/or the Premises or
otherwise, as the case may be, then the amount of Tenant’s Tax Obligation which
may be otherwise payable by Tenant as provided in this Subsection 4.2.1 shall be
pro-rated on a daily basis based on a three-hundred-sixty-five-(365)-day Tax
Year.

“Taxes” shall mean all taxes, assessments, excises and other charges and
impositions which are general or special, ordinary or extraordinary, foreseen or
unforeseen, of any kind or nature which are levied, assessed or imposed by any
governmental authority upon or against or with respect to the Property, Landlord
or the owner or lessee of personal property used by or on behalf of Landlord in
connection with the Property, or taxes in lieu thereof, and additional types of
taxes to supplement real estate taxes due to legal limits imposed thereon.  If,
at any time, any tax or excise on rents or other taxes, however described, are
levied or assessed against Landlord, either wholly or partially in substitution
for, or in addition to, real estate taxes assessed or levied on the Property,
such tax or excise on rents from the Property or other taxes shall be included
in Taxes; however, Taxes shall not include franchise, estate, inheritance,
succession, capital levy, income (except to the extent that a tax on income or
revenue is levied solely on rental revenues and not on other types of income and
then only from rental revenue generated by the Property) or excess profits taxes
assessed on Landlord.  Taxes also shall include all court costs, attorneys’,
consultants’ and accountants’ fees, and other expenses incurred by Landlord in
analyzing and contesting Taxes through and including all appeals.  Taxes shall
include any estimated payment made by Landlord on account of a fiscal tax period
for which the actual and final amount of taxes for such period has not been
determined by the governmental authority as of the date of any such estimated
payment.

                        4.2.1.1 Tenant as Sole Occupant.  Notwithstanding that
which is set forth in Section 4.2.1 above, for so long as Tenant is the sole
tenant of the Building and occupies one hundred percent (100%) of the Building,
Tenant shall not be obligated to make estimated payments to the Landlord on
account of the Tenant’s tax obligation.  Rather, Tenant shall pay all Taxes
payable with respect to the Premises during the period commencing as of the Rent
Commencement Date and continuing thereafter throughout the Term directly to the
applicable tax collecting authority on or before the last day Taxes can be paid
without interest or penalty.  Either the parties shall, at Landlord’s election:
(i) arrange for the Tax bills to be sent directly to Tenant, or (ii) Landlord
shall forward such bills to Tenant within ten (10) business days after Landlord
receives the same.  Tenant shall promptly furnish to Landlord, for Landlord’s
inspection and for such use as may be proper in protecting Landlord’s estate in
the Premises, official receipts or other proof reasonably satisfactory to
Landlord, evidencing the payment of such Taxes and of any interest or other
charge for delayed payment.  If Tenant shall fail to make any such payment
before interest or penalty, then (a) Tenant shall be responsible for any
penalties or interest charges resulting from late payment of such Taxes, and (b)
Landlord may, but shall not be obligated to, make such payment and Tenant shall
immediately reimburse Landlord with interest at the Default Rate.  At such time
as Tenant is no longer the sole occupant of one hundred percent (100%) of the
Building, Tenant shall then pay to Landlord as additional rent, Tenant’s
Percentage of Taxes as set forth in Section 4.2.1 above.

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4.2.2        OPERATING COSTS

.  Commencing as of the Rent Commencement Date and continuing thereafter
throughout the Term, Tenant shall pay to Landlord, as Additional Rent, Tenant’s
Percentage of all Operating Costs, (as hereinafter defined) paid or incurred by
Landlord with respect to the Property in any twelve-(12)-month period
established by Landlord (an “Operating Year”) during the Term of this Lease
(“Tenant’s Operating Cost Obligation”). Tenant shall pay to Landlord, as
Additional Rent, on the first day of each calendar month during the Term but
otherwise in the manner provided for the payment of Annual Fixed Rent, estimated
payments on account of Tenant’s Operating Cost Obligation, such monthly amounts
to be sufficient to provide to Landlord, by the end of each Operating Year, a
sum equal to Tenant’s Operating Cost Obligation for such Operating Year, as
estimated by Landlord from time to time.  Within a reasonable period of time
after the end of each Operating Year during the Term (but not to exceed one
hundred twenty (120) days after the end of such Operating Year), Landlord shall
furnish to Tenant an itemized statement setting forth the amount of Operating
Costs for the preceding Operating Year and a computation of Tenant’s Operating
Cost Obligation for such Operating Year.  Any such year-end statement by
Landlord relating to Operating Costs shall be final and binding upon Tenant
unless it shall within thirty (30) days after receipt thereof, contest any items
therein by giving notice to Landlord specifying each item contested and the
reasons therefor.  If, at the expiration of each Operating Year in respect of
which monthly installments on account of Tenant’s Operating Cost Obligation
shall have been made as aforesaid, the total of such monthly remittances is
greater than Tenant’s Operating Cost Obligations for such Operating Year,
Landlord shall credit such overpayment against Tenant’s subsequent obligations
on account of Operating Costs (or promptly refund such overpayment if the Term
of this Lease has ended and Tenant has no further obligation to Landlord); if
the total of such remittances is less than Tenant’s Operating Cost Obligations
for such Operating Year, Tenant shall pay the difference to Landlord within ten
(10) days after being so notified by Landlord. 

In the event that the Rent Commencement Date shall occur or the Term of this
Lease shall expire or be terminated during any Operating Year or Tenant’s
Percentage shall be modified during any Operating Year due to a change in the
rentable area of the Building and/or the Premises or otherwise, as the case may
be, then the amount of the Operating Cost Excess which may be payable by Tenant
as provided in this Subsection 4.2.2 shall be pro-rated on a daily basis based
on a three-hundred-sixty-five-(365)-day Operating Year.

“Operating Costs” shall include, without limitation, all costs and expenses paid
or incurred for the operation, cleaning, management, maintenance, repair, upkeep
and security of the Property, including, without limitation:

(A)                ALL SALARIES, WAGES, FRINGE BENEFITS, PAYROLL TAXES AND
WORKMEN’S COMPENSATION INSURANCE PREMIUMS RELATED THERETO AND ALL OTHER COSTS
PAID OR INCURRED WITH RESPECT TO EMPLOYMENT OF PERSONNEL AT OR ABOVE THE LEVEL
OF AREA MANAGER WHO ARE PRIMARILY AND DIRECTLY  ENGAGED IN OPERATION,
ADMINISTRATION, CLEANING, MAINTENANCE, REPAIR, UPKEEP AND SECURITY

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OF THE PROPERTY INCLUDING, WITHOUT LIMITATION, SUPERVISORS, PROPERTY MANAGERS,
ACCOUNTANTS, BOOKKEEPERS, CARPENTERS, ENGINEERS, MECHANICS, ELECTRICIANS AND
PLUMBERS;

(B)               ALL UTILITIES AND OTHER COSTS RELATED TO PROVISION OF HEAT
(INCLUDING OIL, STEAM AND/OR GAS), ELECTRICITY, AIR CONDITIONING, AND WATER
(INCLUDING SEWER CHARGES) AND OTHER UTILITIES TO THE COMMON AREAS OF THE
PROPERTY (EXCLUSIVE OF REIMBURSEMENT TO LANDLORD FOR ANY OF SAME RECEIVED AS A
RESULT OF DIRECT BILLING TO ANY TENANT OF THE BUILDING);

(C)                ALL COSTS, INCLUDING SUPPLIES, MATERIAL AND EQUIPMENT COSTS,
FOR CLEANING AND JANITORIAL SERVICES TO THE COMMON AREAS OF THE PROPERTY AND, IF
APPLICABLE, ADJACENT WALKS AND WAYS (INCLUDING, WITHOUT LIMITATION, TRASH
REMOVAL AND EXTERIOR WINDOW CLEANING), AND INTERIOR AND EXTERIOR LANDSCAPING AND
PEST CONTROL;

(D)               THE COST OF REPLACEMENTS FOR TOOLS AND OTHER SIMILAR EQUIPMENT
USED IN THE REPAIR, MAINTENANCE, CLEANING AND PROTECTION OF THE PROPERTY,
PROVIDED THAT, IN THE CASE OF ANY SUCH EQUIPMENT USED JOINTLY ON OTHER PROPERTY
OF LANDLORD, SUCH COSTS SHALL BE SUITABLY PRORATED AMONG THE PROPERTY AND SUCH
OTHER PROPERTIES;

(E)                ALL COSTS AND PREMIUMS FOR FIRE, CASUALTY, RENTAL INCOME,
LIABILITY AND SUCH OTHER INSURANCE AS MAY BE MAINTAINED FROM TIME TO TIME BY
LANDLORD DIRECTLY RELATING TO THE PROPERTY (“INSURANCE PREMIUMS”) AND PREMIUMS
FOR FIDELITY BONDS COVERING PERSONS HAVING CUSTODY OR CONTROL OVER FUNDS OR
OTHER PROPERTY OF LANDLORD RELATING TO THE PROPERTY;

(F)                SUBJECT TO THE LAST PARAGRAPH OF THIS SECTION 4.2.2, ALL
COSTS OF MAINTAINING, REPAIRING, DECORATING, OPERATING, ADMINISTERING,
INSPECTING AND PROTECTING THE PROPERTY (INCLUDING, WITHOUT LIMITATION, LIGHTING,
INSTALLATION, MAINTENANCE, REPAIR AND ALTERATION OF SIGNS, SNOW REMOVAL ON THE
PROPERTY AND ADJACENT WALKS AND WAYS, PAVING, PATCHING AND RESTRIPING OF PARKING
AREAS AND OPERATION, MAINTENANCE, REPAIR OF HEATING, VENTILATING AND AIR
CONDITIONING EQUIPMENT, FIRE PROTECTION AND SECURITY SYSTEMS, GENERATORS,
PARKING AREAS AND ANY OTHER COMMON BUILDING EQUIPMENT, SYSTEMS OR FACILITIES),
AND ALL COSTS OF STRUCTURAL AND OTHER REPAIRS AND REPLACEMENTS (OTHER THAN
REPAIRS FOR WHICH LANDLORD HAS RECEIVED FULL REIMBURSEMENT FROM CONTRACTORS,
OTHER TENANTS OF THE BUILDING OR FROM OTHERS) NECESSARY TO KEEP THE PROPERTY IN
GOOD WORKING ORDER, REPAIR, APPEARANCE AND CONDITION;

(G)               COSTS OF COMPLIANCE WITH ANY LAWS, RULES, REGULATIONS, OR
ORDINANCES, AND AGREEMENTS (“PARK AGREEMENT COSTS”)  APPLICABLE TO THE BUILDING
OR THE PROPERTY, WHICH CONFORMANCE IS NOT THE RESPONSIBILITY OF ANY TENANT OF
THE BUILDING, AND WHICH LANDLORD ELECTS OR IS REQUIRED TO PERFORM, AND COSTS OF
REMOVAL OR REMEDIATION OF OR TESTING AND MONITORING FOR ANY TOXIC OR HAZARDOUS
MATERIAL IN THE BUILDING OR PROPERTY, WHICH IS NOT THE RESPONSIBILITY OF ANY
TENANT OF THE BUILDING, AND WHICH LANDLORD ELECTS TO PERFORM;

(H)               ALL COSTS INCURRED IN CONNECTION WITH THE ADMINISTRATION AND
SUPERVISION OF ALL MATTERS REFERRED TO IN ITEMS (A) THROUGH (G) HEREOF AND IN
PERFORMING LANDLORD’S OBLIGATIONS UNDER ARTICLE 5, INCLUDING LANDLORD’S OFFICE
OVERHEAD COSTS PROVIDED THAT, IF ANY SUCH ADMINISTRATIVE OR SUPERVISORY
PERSONNEL ARE ALSO EMPLOYED ON OTHER PROPERTY OF LANDLORD, SUCH COST OF
COMPENSATION SHALL BE SUITABLY PRORATED AMONG THE PROPERTY AND SUCH OTHER
PROPERTIES;

 

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(I)                 PAYMENTS UNDER ALL SERVICE CONTRACTS RELATING TO MATTERS
REFERRED TO IN ITEMS (A) THROUGH (H) HEREOF;

(J)                 AN ADMINISTRATIVE FEE OF UP TO FIVE (5%) PERCENT OF THE
TOTAL COSTS OF THE OPERATION, CLEANING, MANAGEMENT, MAINTENANCE, REPAIR, UPKEEP
AND SECURITY OF THE PROPERTY, PROVIDED THAT SO LONG AS TENANT LEASES AND
OCCUPIES ONE HUNDRED (100%) PERCENT OF THE BUILDING, TENANT SHALL NOT BE CHARGED
WITH ANY ADMINISTRATIVE FEE; AND

(K)               ATTORNEY’S FEES AND DISBURSEMENTS (EXCLUSIVE OF ANY SUCH FEES
AND DISBURSEMENTS INCURRED IN TAX ABATEMENT PROCEEDINGS OR IN THE PREPARATION OF
LEASES) AND AUDITING AND OTHER PROFESSIONAL FEES AND EXPENSES, WHICH ARE
DIRECTLY ATTRIBUTABLE TO THE PROPERTY.

Notwithstanding the foregoing, Operating Costs shall not include capital
expenditures incurred by Landlord, except for the following (“Permitted 
Capital  Expenditures”): (a) capital expenditures which, in Landlord’s
reasonable judgment, are projected to reduce Operating Costs, and (b) capital
expenditures which are required as a result of laws, ordinances or regulations
which first are applicable to the Property after the Date of this Lease.

            If, during the Term of this Lease, Landlord shall make any Permitted
Capital Expenditure, Landlord may include in Operating Costs for the Operating
Year in which such expenditure was made and in Operating Costs for each
succeeding Operating Year an annual charge‑off of such capital expenditure. 
Annual charge‑offs shall be equal to the level payments of principal and
interest necessary to amortize the original capital expenditure over the useful
life of the improvement, repair, alteration or replacement made with the capital
expenditure using an interest rate reasonably determined by Landlord as being
the interest rate being charged at the time of the original capital expenditure
for long-term mortgages by institutional lenders on like properties within the
greater Rochester, New York area; and the useful life shall be determined
reasonably by Landlord in accordance with then prevailing customs and practices
of the real estate industry in the greater Rochester, New York area,
consistently applied.

Operating Costs shall be determined in accordance with generally accepted
accounting principles and practices consistently applied.

4.2.2.1  AUDIT RIGHTS.

Provided Tenant shall have paid all amounts invoiced by Landlord on account of
Operating Costs for the applicable Operating Year, Landlord shall permit Tenant,
at Tenant’s sole cost and expense, except as hereinafter provided, to review any
of Landlord’s invoices and statements relating to Operating Costs for such
Operating Year, at the place where such invoices and statements are customarily
maintained by Landlord, provided that such review is requested by notice given
to Landlord (the “Review Notice”) within one hundred twenty (120) days after
Tenant’s receipt of Landlord’s year-end statement of Operating Costs for the
applicable Operating Year (the “Final Statement”) and thereafter undertaken by
Tenant or any third party (provided such third party is compensated on an hourly
or lump-sum basis and not on a contingency fee basis) with due diligence.  If
Tenant objects to Landlord’s accounting of any Operating Costs, Tenant shall,
not later than the later to occur of (i) the last day on which Tenant may give a
Review Notice or (ii) thirty (30) days after Landlord makes its books and
records available to Tenant if Tenant has given Landlord a Review Notice timely,
give Landlord a notice (the “Dispute Notice”) that Tenant disputes the
correctness of such accounting, specifying the particular items which Tenant
claims are incorrect.  If Tenant shall not give a Dispute Notice timely, then
Tenant shall be deemed to have waived any and all objections to such Final
Statement.  If any such dispute has not been settled by agreement within two (2)
months thereafter, either party may submit the dispute to arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association.  The decision of the arbitrators shall be final and binding on
Landlord and Tenant, and judgment thereon may be entered in any court of
competent jurisdiction.

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If it should be agreed or decided that Operating Costs were overstated by five
percent (5%) or more, then Landlord shall promptly reimburse Tenant for the
reasonable costs incurred by Tenant in reviewing Landlord’s invoices and
statements, Tenant’s reasonable arbitration costs, plus any excess amount paid
by Tenant on account of overstated Operating Costs with interest at the Default
Rate.  If it should be decided that Operating Costs were not overstated at all,
then Tenant shall, as Additional Rent, promptly reimburse Landlord for its costs
incurred in the arbitration and in preparing for Tenant’s review of invoices and
statements, and if Operating Costs shall have been understated or Tenant shall
not have paid the Operating Costs Obligation in full, Tenant shall, as
Additional Rent, promptly pay any deficiency.  In the event of an overstatement
which is less than five percent (5%), Landlord shall reimburse Tenant for the
excess amount paid by Tenant on account of overstated Operating Costs without
interest, and each party shall be responsible for its own costs incurred in
connection with such dispute.  Tenant shall keep confidential all agreements
involving the rights provided in this section and the results of any audits or
arbitration conducted hereunder  Notwithstanding the foregoing, Tenant shall be
permitted to furnish the foregoing information to its attorneys and accountants
to the extent necessary to perform their respective service for Tenant.

4.2.2.2  TENANT AS SOLE OCCUPANT.   

            So long as Tenant is the sole occupant of the Building and occupies
one hundred percent (100%) of the entire Building, the Tenant shall be solely
responsible for, and shall directly incur all Operating Costs of the Property,
as set forth above, except for the following costs (“Single Tenant Costs”): (i)
Insurance Premiums, (ii) Park Agreement Costs, (iii) Landlord’s accounting costs
in connection with the Property, and (iv) any Permitted Capital Expenditures . 
Therefore, prior to the time that Tenant is no longer the sole occupant of one
hundred percent (100%) of the Building, Operating Costs of the Property shall be
deemed to include only the Single Tenant Costs.  Thereafter, Operating Costs
shall be deemed to include all Operating Costs, as defined above, incurred by
Landlord with respect to the Property.

4.3              PERSONAL PROPERTY AND SALES TAXES

.  Tenant shall pay all taxes charged, assessed or imposed upon the personal
property of Tenant, and all taxes on any sales of inventory, merchandise or
other goods or services by Tenant in, upon or from the Premises.

4.4              INSURANCE 

.  Tenant shall, at its expense, take out and maintain, throughout the Term of
this Lease, the following insurance:

 

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4.4.1        INSURANCE POLICIES. 

Commercial general liability insurance (on an occurrence basis, and on a 1988
ISO CGL form or its equivalent) including without limitation, broad form
contractual liability, bodily injury, property damage, fire legal liability, and
products and completed operations coverage) under which Tenant is named as an
insured and Landlord and Reit Management & Research LLC (and the holder of any
mortgage on the Premises or Property, as set out in a notice from time to time)
are named (on an ISO Form or as otherwise acceptable to Landlord) as additional
insureds as their interests may appear, in an amount which shall, at the
beginning of the Term, be at least equal to the Commercial General Liability
Insurance Limits, and, which, from time to time during the Term, shall be for
such higher limits, if any, as Landlord shall reasonably determine to be
customarily carried in the area in which the Premises are located at property
comparable to the Premises and used for similar purposes;

Worker’s compensation insurance with statutory limits covering all of Tenant’s
employees working on the Premises;

So-called “special form” property insurance on a “replacement cost” basis with
an agreed value endorsement covering all furniture, furnishings, fixtures and
equipment and other personal property brought to the Premises by Tenant or any
party claiming under Tenant and all improvements and betterments to the Premises
performed at Tenant’s expense; and

So-called “business income and extra expense” insurance covering six (6) months
loss of income.

4.4.2        REQUIREMENTS 

.  All such policies shall contain deductibles not in excess of that reasonably
approved by Landlord, shall contain a clause confirming that such policy and the
coverage evidenced thereby shall be primary with respect to any insurance
policies carried by Landlord and shall be obtained from responsible companies
qualified to do business and in good standing in the state or district in which
the Property is located, which companies shall have a general policy holder’s
rating in Best’s of at least A+ X or otherwise be acceptable to Landlord.  A
copy of each paid-up policy evidencing such insurance (appropriately
authenticated by the insurer) or a certificate (on ACORD Form 27 or its
equivalent) of the insurer, certifying that such policy has been issued and paid
in full, providing the coverage required by this Section and containing
provisions specified herein, shall be delivered to Landlord prior to the
commencement of the Term of this Lease and, upon renewals, not less than thirty
(30) days prior to the expiration of such coverage.  Each such policy shall be
non-cancelable and not materially changed with respect to the interest of
Landlord and such mortgagees of the Property (and others that are in privity of
estate with Landlord of which Landlord provides notice to Tenant from time to
time) without at least thirty (30) days’ prior written notice thereto.  Any
insurance required of Tenant under this Lease may be furnished by Tenant under a
blanket policy carried by it provided that such blanket policy shall reference
the Premises, and shall guarantee a minimum limit available for the Premises
equal to the insurance amounts required in this Lease.  Landlord may, at any
time, and from time to time, inspect and/or copy any and all insurance policies
required to be procured by Tenant hereunder.

 

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4.4.3        WAIVER OF SUBROGATION»

.  Landlord and Tenant shall each endeavor to secure an appropriate clause in,
or an endorsement upon, each property damage insurance policy obtained by it and
covering the Building, the Premises or the personal property, fixtures and
equipment located therein or thereon, pursuant to which the respective insurance
companies waive subrogation and permit the insured, prior to any loss, to agree
with a third party to waive any claim it might have against said third party. 
The waiver of subrogation or permission for waiver of any claim hereinbefore
referred to shall extend to the agents of each party and its employees and, in
the case of Tenant, shall also extend to all other persons and entities
occupying or using the Premises by, through or under Tenant.  If and to the
extent that such waiver or permission can be obtained only upon payment of an
additional charge then the party benefiting from the waiver or permission shall
pay such charge upon demand, or shall be deemed to have agreed that the party
obtaining the insurance coverage in question shall be free of any further
obligations under the provisions hereof relating to such waiver or permission
from such insurance companies.

Subject to the foregoing provisions of this Subsection 4.4.3, and insofar as may
be permitted by the terms of the property insurance policies carried by it, each
party hereby releases the other with respect to any claim which it might
otherwise have against the other party for any loss or damage to its property,
excluding any deductible amounts, to the extent such damage is actually covered
or would have been covered by policies of property insurance required by this
Lease to be carried by the respective parties hereunder.  In addition, Tenant
agrees to exhaust any and all claims against its property insurer(s) prior to
commencing an action against Landlord for any property loss.

4.5              UTILITIES 

.  Landlord shall be under no obligation to install any utility systems or
equipment in the Premises in addition to those existing in the Premises as of
the Date of this Lease or to furnish any utilities to the Premises except for
water as provided in Subsection 5.1.3.  Tenant shall make its own arrangements
for the installation of any utility system or equipment required by Tenant in
addition to those installed in the Premises as of the Date of this Lease
(subject to Landlord’s approval and in accordance with Subsection 6.2.5 of this
Lease) and for provision of all utilities to the Premises (except for domestic
cold water), and Tenant shall contract for and pay directly all charges for
electricity, gas, telephone, and any other utilities provided to the Premises
for any purpose, whether designated as a charge, tax, assessment, fee or
otherwise; all such charges to be paid as the same from time to time become due.

            Notwithstanding the foregoing, in light of Tenant’s obligation to
pay for all utilities at the 205 Indigo Creek Premises until the Termination
Date (as defined in the Termination Agreement), Tenant shall not be obligated to
pay for the electricity, gas, and water consumed on the Premises until the
Occupancy Date.

 

4.6              LATE PAYMENT OF RENT

.  If any installment of Annual Fixed Rent or Additional Rent is not paid on or
before the date the same is due, it shall bear interest (as Additional Rent)
from the date due until the date paid at the Default Rate (as defined in Section
8.4).  In addition, if any installment of Annual Fixed Rent or Additional Rent
is unpaid for more than seven (7) days after the date due, Tenant shall pay to
Landlord a late charge (“Late Charge”) equal to the greater of One Hundred
Dollars ($100) or five percent (5%) of the delinquent amount.  Notwithstanding
the foregoing, except with respect to payments due by Tenant under Section
4.2.1.1 above (which shall be governed by the provisions of said Section
4.2.1.1), the first two (2) times that Landlord determines to impose the Late
Charge, Landlord shall give Tenant written notice of its intent to impose the
Late Charge, and the Default Rate and Late Charge shall be waived provided that
the amount which is past due is paid within ten (10) days after Tenant receives
such written notice from Landlord.  The parties agree that the amount of the
Late Charge represents a reasonable estimate of the cost and expense that would
be incurred by Landlord in processing and administration of each delinquent
payment by Tenant, but the payment of such late charges shall not excuse or cure
any Default of Tenant under this Lease. Absent specific provision to the
contrary, all Additional Rent shall be due and payable in full ten (10) days
after demand by Landlord.

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4.7              SECURITY DEPOSIT

.  [INTENTIONALLY OMITTED].

ARTICLE 5
LANDLORD’S COVENANTS

5.1              AFFIRMATIVE COVENANTS

.  Landlord shall, during the Term of this Lease provide the following:

5.1.1        REPAIRS 

.  Except as otherwise expressly provided herein, Landlord shall promptly make
such repairs and replacements to the roof, exterior walls (exclusive of inside
surfaces, glass, dock bumpers, and louvers or doors therein), floor slabs and
other structural components of the Building, and to the common areas and
facilities of the Property (including the common pipes, conduits and utility
lines which serve the Premises in common with other portions of the Property) as
may be necessary to keep them in good repair and condition (exclusive of
equipment installed by Tenant and except for those repairs required to be made
by Tenant pursuant to Subsection 6.1.3 hereof and repairs or replacements
occasioned by any act or negligence of Tenant, its servants, agents, customers,
contractors, vendors, employees, invitees, or licensees).

5.1.2        MAINTENANCE 

.  If Tenant is no longer the sole occupant of the Building, then Landlord shall
provide cleaning and maintenance to the Parking Facility at regular intervals
and to the walkways, driveways and landscaped areas on the Property (including
snow removal to the extent necessary to maintain reasonable access to the
Building and Parking Facility) in accordance with standards generally prevailing
throughout the Term hereof in comparable so-called “flex” buildings in the
greater Rochester, New York area.

5.1.3        WATER 

.  Landlord shall furnish domestic cold water to the Premises for ordinary
drinking, lavatory and toilet facilities consistent with ordinary office and
warehouse uses.  If Tenant uses water for any purpose other than ordinary
drinking, lavatory and toilet purposes, Landlord may assess a reasonable charge
for the additional water so used, or install a water meter and thereby measure
Tenant’s water consumption for all purposes.  In the latter event, Tenant shall
pay the cost of the meter and the cost of installation thereof and shall keep
such meter and installation equipment in good working order and repair.  Tenant
agrees to pay for water consumed, as shown on such meter, together with the
sewer charge based on such meter charges, as and when bills are rendered, and if
Tenant shall fail to make such payment, Landlord may pay such charges and
collect the same from Tenant as Additional Rent.

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5.1.4        EXTERIOR LIGHTING

.  Landlord shall provide reasonable lighting to the Parking Facility and to the
walkways and driveways on the Property.

5.2              INTERRUPTION 

.  Landlord shall have no responsibility or liability to Tenant for failure,
interruption, inadequacy, defect or unavailability of any services, facilities,
utilities, repairs or replacements or for any failure or inability to provide
access or to perform any other obligation under this Lease caused by breakage,
accident, fire, flood or other casualty, strikes or other labor trouble, order
or regulation of or by any governmental authority, inclement weather, repairs,
inability to obtain or shortages of utilities, supplies, labor or materials,
war, civil commotion or other emergency, transportation difficulties or due to
any act or neglect of Tenant or Tenant’s servants, agents, employees or
licensees or for any other cause beyond the reasonable control of Landlord, and
in no event shall Landlord be liable to Tenant for any indirect or consequential
damages suffered by Tenant due to any such failure, interruption, inadequacy,
defect or unavailability; and failure or omission on the part of Landlord to
furnish any of same for any of the reasons set forth in this paragraph shall not
be construed as an eviction of Tenant, actual or constructive, nor entitle
Tenant to an abatement of rent, nor render the Landlord liable in damages, nor
release Tenant from prompt fulfillment of any of its covenants under this
Lease. 

Landlord reserves the right to deny access to the Building and to interrupt the
services of the HVAC, plumbing, electrical or other mechanical systems or
facilities in the Building when necessary from time to time by reason of
accident or emergency, or for repairs, alterations, replacements or improvements
which in the reasonable judgment of Landlord are desirable or necessary, until
such repairs, alterations, replacements or improvements shall have been
completed.  Landlord shall use all reasonable efforts to minimize the duration
of any such interruption and to give to Tenant at least three (3) days’ notice
if service is to be interrupted, except in cases of emergency.

Notwithstanding the foregoing, if due to Landlord’s default or its negligence or
willful misconduct: (i) the Premises or any portion thereof are unusable by
Tenant for a period of more than five (5) consecutive Business Days following
notice from Tenant due to (I) a lack of any of water, sewer, elevator service,
access or electricity or (II) the failure by Landlord to perform repairs which
Landlord is obligated to perform pursuant to this Section 5.1, and (ii) Tenant
shall, concurrently with the giving of such notice, discontinue use of the
Premises or the portion thereof which is unusable as a  result (other than for
sporadic  purposes such as such as salvage, security or retrieval of property),
then as Tenant’s sole remedy the Annual Fixed Rent and Additional Rent on
account of Taxes and Operating Costs shall be equitably abated on a pro rata
basis for such portion of the Premises rendered unusable for the period
commencing on the expiration of such five (5) Business Day period and ending on
the date that the Premises (or such portion) is rendered usable.  If more than
fifty percent (50%) of the Premises is rendered unusable and if Tenant shall
vacate the entire Premises, then the aforesaid abatement shall be a full
abatement. Any notice from Tenant pursuant to the first sentence or this
paragraph shall expressly state that the failure of Landlord to cure any claimed
default timely shall give rise to Tenant’s rights of rent abatement

 

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5.3              OUTSIDE SERVICES

.  In the event Tenant wishes to obtain services or to hire vendors relating to
the Premises, Tenant shall first obtain the prior approval of Landlord for the
installation and/or utilization of such services or vendors.  Such approval
shall not be unreasonably withheld, conditioned, or delayed, and which approval
shall not be required with respect to a vendor whose services will cost less
than $25,000 per occurrence.  Such services shall include, but shall not be
limited to, utility providers, security services, moving services, equipment
installers, catering services and the like.  Notwithstanding any Landlord
approval of the installation and/or utilization of such services or vendors,
such installation and utilization shall be at Tenant’s sole cost, risk and
expense.  Whether or not such vendor is approved by Landlord: (i) except with
respect to vendors who provide services on a regularly occurring basis and for
whom Tenant has previously notified Landlord of such vendor’s entry to the
Building , (ii) except with respect to vendors (other than those providing
catering or moving services) whose services will cost less than $25,000 per
occurrence, and (iii) except in an emergency, Tenant shall, at least five (5)
days prior to such vendor’s entry into the Building, give Landlord written
notice advising Landlord of such entry and the services to be provided by such
vendor.  In all events all vendors shall be required to comply with Landlord’s
insurance requirements and reasonable rules and regulations. 

5.4              ACCESS TO BUILDING

.  Tenant acknowledges that Tenant is responsible for regulating access to the
Premises by its personnel, invitees and others (subject to Landlord’s rights of
entry as provided in this Lease and by law) and for providing security to the
Premises and for its own personnel and invitees whenever located therein. 
Tenant acknowledges that Landlord is not providing security services of any kind
to the Premises. Subject to the provisions of Sections 5.2 and 5.4, Tenant shall
have access to the Premises and Parking Facility on a 24‑hour/7-day a week
basis.

ARTICLE 6
TENANT’S ADDITIONAL COVENANTS

6.1              AFFIRMATIVE COVENANTS

.  Tenant shall do the following:

6.1.1        PERFORM OBLIGATIONS

.  Tenant shall perform promptly all of the obligations of Tenant set forth in
this Lease; and pay when due the Annual Fixed Rent and Additional Rent and all
other amounts which by the terms of this Lease are to be paid by Tenant.

6.1.2        USE 

.  Tenant shall, during the Term of this Lease, use the Premises only for the
Permitted Uses and from time to time to procure and maintain all licenses and
permits necessary therefor and for any other use or activity conducted at the
Premises, at Tenant’s sole expense.  The Permitted Uses shall expressly exclude
use for utility company offices, or employment agency or governmental or
quasi‑governmental offices.  Landlord makes no express warranty or
representation, and disclaims any implied warranty or representation, that the
Permitted Uses are consistent or in compliance with any zoning or other land use
ordinance, code, or regulation, or any matters of public record.  Tenant
acknowledges that it has performed such investigation as it deems appropriate to
satisfy itself that the Premises are suitable for its purposes; and no
limitation on the uses permitted by law or any matters of public record shall
entitle Tenant to an abatement of rent, nor release Tenant from the prompt
compliance with any of its obligations under this Lease.  

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6.1.3        REPAIR AND MAINTENANCE AND CLEANING

.  Tenant shall, during the Term of this Lease, maintain the Premises in neat
and clean order and condition and perform all repairs to the Premises and all
fixtures, systems, and equipment therein or serving the Premises exclusively
(including, without limitation, all heating, ventilating and air-conditioning
equipment (“HVAC Equipment”); electrical systems and equipment; plumbing and
sewer lines to the point where they intersect with common lines; interior walls
and interior surfaces of exterior walls; ceilings, windows, doors and plate
glass; the dock levelers, bumpers and loading equipment and apparatus located
within or serving the Premises; and Tenant’s personal property) as are necessary
to keep them in good and clean working order, appearance and condition,
reasonable use and wear thereof and damage by fire or by unavoidable casualty
only excepted and shall replace any damaged or broken glass in windows and doors
of the Premises (except glass in the exterior walls of the Building) with glass
of the same quality as that damaged or broken.  Tenant shall provide internally
or contract separately for janitorial services for the Premises with a
janitorial services provider reasonably acceptable to Landlord, and Tenant shall
cause the Premises to be cleaned in accordance with standards at least equal to
Landlord’s janitorial standards for comparable so-called “flex-office” leased
space in the greater Rochester, New York area.  Tenant shall keep garbage, trash
or other refuse in vermin-proof containers within the interior of the Premises
until removed and shall dispose of the same in properly sealed bags placed in a
covered metal dumpster installed and maintained by Tenant at its expense at a
location near the Building where designated by the Town of Brighton and approved
by Landlord, which approval shall not be unreasonably withheld, conditioned, or
delayed.  Tenant shall, at its expense, cause such dumpster to be emptied by a
licensed contractor reasonably acceptable to Landlord and in accordance with any
procedures reasonably established by Landlord therefor and shall keep the
dumpster area clean.

If Tenant is the sole occupant of the Building, then Tenant shall provide
cleaning and maintenance to the Parking Facility at regular intervals and to the
walkways, driveways and landscaped areas on the Property (including snow removal
to the extent necessary to maintain reasonable access to the Building and
Parking Facility) in accordance with standards generally prevailing throughout
the Term hereof in comparable so-called “flex” buildings in the greater
Rochester, New York area.

In furtherance of Tenant’s obligations under this Subsection 6.1.3, Tenant, at
its sole cost and expense, shall provide proper periodic, normal and customary
maintenance and inspection of, and except as hereinafter provided all repairs
to, the HVAC Equipment within the Premises or serving the Premises exclusively,
and shall maintain a contract for repair and regular service thereof with a
reputable maintenance company reasonably acceptable to Landlord.

6.1.4        COMPLIANCE WITH LAW

.  Tenant shall, during the Term of this Lease, make all repairs, alterations,
additions or replacements to the Premises required by any law or ordinance or
any order or regulation of any public authority as such pertains to Tenant’s
particular use of the Premises (i.e. other than general business office use,
Landlord hereby agreeing that any alteration, addition or replacement required
in connection with general business office uses shall be made by Landlord and
paid by Tenant as a Capital Cost included in Operating Costs in accordance with
the last paragraph of Section 4.2.2); keep the Premises safe and equipped with
all safety appliances so required; and comply with, and perform all repairs,
alterations, additions or replacements required by, the orders and regulations
of all governmental authorities with respect to zoning, building, fire, health
and other codes, regulations, ordinances or laws applicable to the Premises or
other portions of the Property and arising out of Tenant’s particular use being
conducted in or on the Premises or arising out of any work performed by Tenant,
except that Tenant may (but only so long as (i) Landlord shall not be subject to
any fine or charge, (ii) neither the Property nor any portion thereof shall be
subject to being condemned or vacated and (iii) neither the Property nor any
portion thereof shall be subject to any lien or encumbrance) defer compliance so
long as the validity of any such law, ordinance, order or regulation shall be
contested by Tenant in good faith and by appropriate legal proceedings, if
Tenant first gives Landlord assurance or security against any loss, cost or
expense on account thereof in form and amount reasonably acceptable to Landlord.

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6.1.5        INDEMNIFICATION 

.  Tenant shall neither hold, nor attempt to hold, Landlord or its employees or
Landlord’s agents or their employees liable for, and Tenant shall  indemnify and
hold harmless Landlord, its employees and Landlord’s agents and their employees
from and against, any and all demands, claims, causes of action, fines,
penalties, damage, liabilities, judgments and expenses (including, without
limitation, attorneys' fees) incurred in connection with or arising from:  (i)
the use or occupancy or manner of use or occupancy of the Premises by Tenant or
any person claiming under Tenant; (ii) any matter occurring on the Premises
during the Term; (iii) any acts, omissions or negligence of Tenant or any person
claiming under Tenant, or the contractors, vendors, agents, employees, invitees
or visitors of Tenant or any such person; (iv) any breach, violation or
nonperformance by Tenant or any person claiming under Tenant or the employees,
agents, contractors, vendors, invitees or visitors of Tenant or any such person
of any term, covenant or provision of this Lease or any law, ordinance or
governmental requirement of any kind; and (v) any injury or damage to the
person, property or business of Tenant, its employees, agents, contractors,
vendors, invitees, visitors or any other person entering upon the Property under
the express or implied invitation of Tenant.  If any action or proceeding is
brought against Landlord or its employees or Landlord’s agents or their
employees by reason of any such claim, Tenant, upon notice from Landlord, shall
defend the same, at Tenant's expense, with counsel reasonably satisfactory to
Landlord.  Notwithstanding the foregoing in no event shall this Subsection 6.1.5
require Tenant to indemnify or defend Landlord or its employees or Landlord’s
agents or their employees against any loss, cost, damage, liability, claim, or
expense to the extent arising out of the negligence or willful misconduct of
Landlord or its employees or Landlord’s agents or their employees.

6.1.6        LANDLORD’S RIGHT TO ENTER

.  Tenant shall, during the Term of this Lease, permit Landlord and its agents
and invitees to enter into and examine the Premises upon reasonable advance
notice (except that no prior notice shall be required in an emergency, for
routine maintenance and janitorial services, or if entry is made at the request
of Tenant) and at reasonable times and to show the Premises to prospective
lessees, lenders, partners and purchasers and others having a bona fide interest
in the Premises, and to make such repairs, alterations and improvements and to
perform such testing and investigation as Landlord shall reasonably determine to
make or perform, and, during the last six (6) months prior to the expiration of
this Lease, to keep affixed in a suitable place notices of availability of the
Premises.

 

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6.1.7        PERSONAL PROPERTY AT TENANT’S RISK

.  Tenant shall, during the Term of this Lease keep, at the sole risk and hazard
of Tenant, all of the furnishings, fixtures, equipment, effects and property of
every kind, nature and description of Tenant and of all persons claiming by,
through or under Tenant which may be on the Property, and if the whole or any
part thereof shall be lost, destroyed or damaged by fire, water or otherwise, or
by the leakage or bursting of water pipes, steam pipes, or other pipes, by theft
or from any other cause, Tenant shall hold harmless and indemnify Landlord from
and against any and all injury, loss, damage or liability to Tenant or to any
other person or entity arising out of said loss or damage.

6.1.8        PAYMENT OF LANDLORD’S COST OF ENFORCEMENT

.  Tenant shall pay on demand Landlord’s expenses, including reasonable
attorneys’ fees, incurred in enforcing any obligation of Tenant under this Lease
or in curing any Default of Tenant under this Lease as provided in Section 8.4.

6.1.9        YIELD UP

.  Tenant shall, at the expiration or earlier termination of the Term of this
Lease, surrender all keys to the Premises; remove all of its trade fixtures and
personal property in the Premises; remove such installations (including wiring
and cabling wherever located), alterations, signs and improvements made (or if
applicable, restore any items removed) by or on behalf of Tenant as Landlord may
request, wherever located; repair all damage caused by such removal; and vacate
and yield up the Premises (including all installations, alterations, signs and
improvements made by or on behalf of Tenant except as Landlord shall request
Tenant to remove), broom clean and in the same good order and repair in which
Tenant is obliged to keep and maintain the Premises by the provisions of this
Lease, normal wear and tear excepted .  Any property not so removed shall be
deemed abandoned and may be removed and disposed of by Landlord in such manner
as Landlord shall determine and Tenant shall pay Landlord the entire cost and
expense incurred by it in effecting such removal and disposition and in making
any incidental repairs and replacements to the Premises and for use and
occupancy during the period after the expiration or earlier termination of the
Term of this Lease and prior to the performance by Tenant of its obligations
under this Subsection 6.1.9.  Tenant shall further indemnify Landlord against
all loss, cost and damage resulting from Tenant’s failure or delay in
surrendering the Premises as above provided.

6.1.10    RULES AND REGULATIONS

.  Provided they are first made known to Tenant, Tenant shall, during the Term
of this Lease, observe and abide by the Rules and Regulations of the Building
set forth as Exhibit B, as the same may from time to time be amended, revised or
supplemented (the “Rules and Regulations”).  Tenant shall further be responsible
for compliance with the Rules and Regulations by the employees, servants, agents
and visitors of Tenant.  The failure of Landlord to enforce any of the Rules and
Regulations against Tenant, or against any other tenant or occupant of the
Building, shall not be deemed to be a waiver of such Rules and Regulations. 
Tenant shall be liable for all injuries or damages sustained by Landlord or
Landlord’s agents or by other tenants, occupants or invitees of the Building
arising by reason of any breach of the Rules or Regulations by Tenant or by
Tenant’s agents or employees.

6.1.11    ESTOPPEL CERTIFICATE

.  Tenant shall, within twenty (20) days following written request by Landlord,
execute, acknowledge and deliver to Landlord a statement in form satisfactory to
Landlord in writing certifying that this Lease is unmodified and in full force
and effect and that Tenant has no defenses, offsets or counterclaims against its
obligations to pay the Annual Fixed Rent and Additional Rent and any other
charges and to perform its other covenants under this Lease (or, if there have
been any modifications, that this Lease is in full force and effect as modified
and stating the modifications and, if there are any defenses, offsets or
counterclaims, setting them forth in reasonable detail), the dates to which the
Annual Fixed Rent and Additional Rent and other charges have been paid, and any
other matter pertaining to this Lease.  Any such statement delivered pursuant to
this Subsection 6.1.11 may be relied upon by any prospective purchaser or
mortgagee of the Property, or any prospective assignee of such mortgage.

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6.1.12    LANDLORD’S EXPENSES FOR CONSENTS

.  Tenant shall reimburse Landlord, as Additional Rent, promptly on demand for
all reasonable legal, engineering and other professional services expenses
incurred by Landlord in connection with all requests by Tenant for consent or
approval hereunder.

6.1.13    FINANCIAL INFORMATION

.  Tenant shall, from and after the Date of this Lease and thereafter throughout
the Term of this Lease, provide Landlord with such information as to Tenant’s
financial condition and/or organizational structure as Landlord or the holder of
any mortgage of the Property requires, within fifteen (15) days of request. 
Notwithstanding the foregoing, so long as Tenant is a publicly traded company,
Tenant shall not be required to deliver any financial statements to Landlord and
in the event Tenant is not a publicly traded company, Landlord agrees that it
will exercise its rights under this Section 6.1.13 only if: (i) after a Default
by Tenant, or (ii) in connection with any proposed sale or refinancing of the
Property.

6.2              NEGATIVE COVENANTS

.  Tenant shall not do the following.

6.2.1        ASSIGNMENT AND SUBLETTING

.  Tenant shall not assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer this Lease or any interest herein or sublease (which term shall be
deemed to include the granting of concessions and licenses and the like) all or
any part of the Premises or suffer or permit this Lease or the leasehold estate
hereby created or any other rights arising under this Lease to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law, or permit the
use or occupancy of the Premises by anyone other than Tenant, or the Premises to
be offered or advertised for assignment or subletting, except as hereinafter
provided.  Unless Tenant’s stock shall be traded on a domestic national
securities exchange, any transfer of the stock or partnership or beneficial
interests or other evidences of ownership of Tenant or the issuance of
additional stock or partnership or beneficial interests or other indicia of
ownership in Tenant or any transaction pursuant to which Tenant is merged or
consolidated with another entity or pursuant to which all or substantially all
of Tenant’s assets are transferred to any other entity shall be deemed to be an
assignment of this Lease.

Notwithstanding the foregoing, Tenant may, without the need for Landlord’s
consent, but only upon not less than ten (10) days prior notice to Landlord,
assign its interest in this Lease (a “Permitted Assignment”) to (i) any entity
which shall be a successor to Tenant either by merger or consolidation (a
“Merger”) or to a purchaser of all or substantially all of Tenant’s assets in
either case provided the successor or purchaser shall have a tangible net worth,
after giving effect to the transaction, of not less than the greater of the net
worth of Tenant named in Section 1.1 as of the Date of this Lease or the net
worth of Tenant named in Section 1.1 immediately prior to such Merger or sale
(the “Required Net Worth”) or (ii) any entity (an “Affiliate”) which is a direct
or indirect subsidiary or parent (or a direct or indirect subsidiary of a
parent) of the named Tenant set forth in Section 1.1, in either case of (i) or
(ii) only so long as (I) the principal purpose of such assignment is not the
acquisition of Tenant’s interest in this Lease (except if such assignment is
made for a valid intracorporate business purpose to an Affiliate) and is not
made to circumvent the provisions of this Subsection 6.2.1, (II) except if
pursuant to a Merger permitted by clause (i) above, Tenant shall,
contemporaneously with such assignment, provide Landlord with a fully executed
counterpart of any such assignment, which assignment shall comply with the
provisions of this Subsection 6.2.1 and shall include an agreement by the
assignee in form reasonably satisfactory to Landlord, to be bound by all of the
terms of this Lease, (III) in the case of an actual or deemed assignment
pursuant to clause (i), Tenant shall provide Landlord, not less than ten (10)
days in advance of any such assignment, evidence reasonably satisfactory to
Landlord of the Required Net Worth of the successor or purchaser, and (IV) there
shall not be a Default of Tenant at the effective date of such assignment. 
Tenant shall also be permitted, without the need for Landlord’s consent, but
only upon not less than ten (10) days prior notice to Landlord, to enter into
any sublease (a “Permitted Sublease”) with any Affiliate provided that such
sublease shall expire upon any event pursuant to which the sublessee thereunder
shall cease to be an Affiliate.  Any assignment to an Affiliate shall provide
that it may, at Landlord’s election, be terminated and deemed void if during the
Term of this Lease such assignee or any successor to the interest of Tenant
hereunder shall cease to be an Affiliate.

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In the event that Tenant shall intend to enter into any sublease or assignment
other than a Permitted Sublease or Permitted Assignment, then Tenant shall, not
later than thirty (30) days prior to the proposed commencement of such sublease
or assignment, give Landlord notice of such intent, identifying the proposed
subtenant or assignee, all of the terms and conditions of the proposed sublease
or assignment and such other information as the Landlord may reasonably
request.  In such case Landlord may elect (a) to terminate the Term of this
Lease if Tenant intends to assign this Lease, or to sublease (including
expansion options) more than fifty percent (50%) of the Premises for a term
(including extension options) of more than half of the remaining Term hereof or
(b) to exclude from the Premises, for the term of such proposed sublease, the
portion thereof to be sublet if the conditions set forth in (a) do not prevail,
by giving notice to Tenant of such election not later than thirty (30) days
after receiving notice of such intent from Tenant.  If Landlord shall give such
notice within such thirty (30) day period, upon the later to occur of (A) the
proposed date of commencement of such proposed sublease or assignment, or (B)
the date which is thirty (30) days after Landlord’s notice, the Term of this
Lease shall terminate or the Premises shall be reduced to exclude the portion of
the Premises intended for subletting, in which case Annual Fixed Rent and
Tenant’s Percentage shall be correspondingly reduced.  If Landlord shall give
its consent, Tenant may enter into such sublease or assignment on the terms and
conditions set forth in such notice from Tenant within one hundred twenty (120)
days of the initially proposed sublease commencement date.  If Tenant shall not
enter into such sublease or assignment within such period and shall still desire
to enter into any sublease or assignment, or if Tenant shall change the terms
and conditions thereof following the date of Tenant’s notice to Landlord, the
first sentence of this paragraph shall again become applicable.

If this Lease is assigned or if the Premises or any part thereof are sublet (or
occupied by any party other than Tenant and its employees) then, after a Default
by Tenant, Landlord may collect the rents from such assignee, subtenant or
occupant, as the case may be, and apply the net amount collected to the Annual
Fixed Rent and Additional Rent herein reserved, but no such collection shall be
deemed a waiver of the provisions set forth in the first paragraph of this
Subsection 6.2.1, the acceptance by Landlord of such assignee, subtenant or
occupant, as the case may be, as a tenant, or a release of Tenant from the
future performance by Tenant of its covenants, agreements or obligations
contained in this Lease.

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Any sublease of all or any portion of the Premises shall provide that it is
subject and subordinate to this Lease and to the matters to which this Lease is
or shall be subject or subordinate, that other than the payment of Annual Fixed
Rent and Additional Rent due pursuant to Section 4.1, Subsections 4.2.1 and
4.2.2 or any obligation relating solely to those portions of the Premises which
are not part of the subleased premises, the subtenant shall comply with and be
bound by all of the obligations of Tenant hereunder, that unless Landlord waives
such prohibition, the subtenant may not enter into any sub-sublease, sublease
assignment, license or any other agreement granting any right of occupancy of
any portion of the subleased premises; and that Landlord shall be an express
beneficiary of any such obligations, and that in the event of termination of
this Lease or reentry or dispossession of Tenant by Landlord under this Lease,
Landlord may, at its option, take over all of the right, title and interest of
Tenant, as sublessor under such sublease, and such subtenant shall, at
Landlord’s option, attorn to Landlord pursuant to the then executory provisions
of such sublease, except that neither Landlord nor any mortgagee of the
Property, as holder of a mortgage or as Landlord under this Lease if such
mortgagee succeeds to that position, shall (a) be liable for any act or omission
of Tenant under such sublease, (b) be subject to any credit, counterclaim,
offset or defense which theretofore accrued to such subtenant against Tenant, or
(c) be bound by any previous modification of such sublease unless consented to
by Landlord and such mortgagee or by any previous prepayment of more than one
(1) month’s rent, (d) be bound by any covenant of Tenant to undertake or
complete any construction of the Premises or any portion thereof, (e) be
required to account for any security deposit of the subtenant other than any
security deposit actually received by Landlord, (f) be bound by any obligation
to make any payment to such subtenant or grant any credits unless specifically
agreed to by Landlord and such mortgagee, (g) be responsible for any monies
owing by Tenant to the credit of the subtenant or (h) be required to remove any
person occupying the Premises or any part thereof; and such sublease shall
provide that the subtenant thereunder shall, at the request of Landlord, execute
a suitable instrument in confirmation of such agreement to attorn.  The
provisions of this paragraph shall not be deemed a waiver of the provisions set
forth in the first paragraph of this Subsection 6.2.1.

Tenant shall not enter into, nor shall it permit any person having an interest
in the possession, use, occupancy or utilization of any part of the Premises to
enter into, any sublease, license, concession, assignment or other agreement for
use, occupancy or utilization of the Premises (i) which provides for rental or
other compensation based on the income or profits derived by any person or on
any other formula such that any portion of such sublease rental, or other
consideration for a license, concession, assignment or other occupancy
agreement, would fail to qualify as “rents from real property” within the
meaning of Section 856(d) of the Internal Revenue Code or any similar or
successor provision thereto, or (ii) under which fifteen percent (15%) or more
of the total rent or other compensation received by Tenant is attributable to
personal property and any such purported lease, sublease, license, concession or
other agreement shall be absolutely void and ineffectual as a conveyance of any
right or interest in the possession, use, occupancy or utilization of such part
of the Premises.

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No subletting or assignment shall in any way impair the continuing primary
liability of Tenant hereunder, and no consent to any subletting or assignment in
a particular instance shall be deemed to be a waiver of the obligation to obtain
the Landlord’s written approval in the case of any other subletting or
assignment.  The joint and several liability of Tenant named herein and any
immediate and remote successor in interest of Tenant (by assignment or
otherwise), and the due performance of the obligations of this Lease on Tenant’s
part to be performed or observed, shall not in any way be discharged, released
or impaired by any (a) agreement which modifies any of the rights or obligations
of the parties under this Lease, (b) stipulation which extends the time within
which an obligation under this Lease is to be performed, (c) waiver of the
performance of an obligation required under this Lease, or (d) failure to
enforce any of the obligations set forth in this Lease.  No assignment,
subletting or occupancy shall affect the Permitted Uses.  Any subletting,
assignment or other transfer of Tenant’s interest in this Lease in contravention
of this Subsection 6.2.1 shall be voidable at Landlord’s option.  Tenant shall
not occupy any space in the Building (by assignment, sublease or otherwise)
other than the Premises.

If the rent and other sums (including, without limitation, all monetary payments
plus the reasonable value of any services performed or any other thing of value
given by any assignee or subtenant in consideration of such assignment or
sublease), either initially or over the term of any assignment or sublease
(other than a Permitted Assignment of a Permitted Sublease), payable by such
assignee or subtenant exceed the Annual Fixed Rent plus Additional Rent called
for hereunder with respect to the space assigned or sublet, Tenant shall pay
fifty  percent (50%) of such excess to Landlord, as Additional Rent, payable
monthly at the time for payment of Annual Fixed Rent.  Nothing in this paragraph
shall be deemed to abrogate the provisions of this Subsection 6.2.1 and
Landlord’s acceptance of any sums pursuant to this paragraph shall not be deemed
a granting of consent to any assignment of the Lease or sublease of all or any
portion of the Premises.

6.2.2        NUISANCE 

.  Tenant shall not injure, deface or otherwise harm the Premises; nor commit
any nuisance; nor permit in the Premises any vending machine (except such as is
used for the sale of merchandise to employees of Tenant) or inflammable fluids
or chemicals (except such as are customarily used in connection with standard
office equipment and light manufacturing, provided that the same comply with
applicable law); nor permit any cooking to such extent as requires special
exhaust venting; nor permit the emission of any objectionable noise or odor; nor
make, allow or suffer any waste; nor make any use of the Premises which is
improper, offensive or contrary to any law or ordinance or which will invalidate
or increase the premiums for any of Landlord’s insurance or which is liable to
render necessary any alteration or addition to the Building; nor conduct any
auction, fire, “going out of business” or bankruptcy sales.

6.2.3        FLOOR LOAD; HEAVY EQUIPMENT

.  Tenant shall not place a load upon any floor of the Premises exceeding the
lesser of the floor load capacity which such floor was designed to carry or
which is allowed by law.  Landlord reserves the right to prescribe the weight
and position of all heavy business machines and equipment, including safes,
which shall be placed so as to distribute the weight.  Business machines and
mechanical equipment which cause vibration or noise shall be placed and
maintained by Tenant at Tenant’s expense in settings sufficient to absorb and
prevent vibration, noise and annoyance.  Tenant shall not move any safe, heavy
machinery, heavy equipment, freight, construction materials or fixtures into or
out of the Premises without Landlord’s prior consent which consent may include a
requirement to provide insurance naming Landlord, and the holder of any mortgage
affecting the Property, as additional insureds, with such coverage and in such
amount as Landlord reasonably requires.  If any such safe, machinery, heavy
equipment, freight, or fixtures requires special handling, Tenant agrees to
employ only persons holding a master rigger’s license to do said work, and that
all work in connection therewith shall comply with applicable laws and
regulations.  Any such moving shall be at the sole risk and hazard of Tenant and
Tenant hereby agrees to exonerate, indemnify and save Landlord harmless against
and from any liability, loss, injury, claim or suit resulting directly or
indirectly from such moving.  Tenant shall schedule such moving at such times as
Landlord shall reasonably designate.  Notwithstanding the above, Tenant shall
have the right to utilize a forklift truck in its normal operations to load,
unload and store its products on pallets in the Building and on the Property,
Tenant expressly agreeing that Tenant shall repair any damage to the Property
caused by the use of any forklift truck and shall indemnify, defend and hold
Landlord harmless against any loss cost or damage (including, without
limitation, reasonable attorneys fees) arising from the use of any forklift
truck.

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6.2.4        ELECTRICITY 

.  Tenant shall not connect to the electrical distribution system serving the
Premises (i) a total load exceeding the lesser of the capacity of such system or
the maximum load permitted from time to time under applicable governmental
regulations or (ii) any apparatus or device in the Premises (1) using current in
excess of 110 volts for its electric outlets and lighting or in excess of 480
volts for the purpose of servicing its HVAC and mechanical systems in the
Building, or (2) which would cause Tenant’s electrical demand load to exceed 1.0
watts per rentable square foot for overhead lighting or 2.0 watts per rentable
square foot for convenience outlets.  The capacity of the electrical
distribution system serving the Premises shall be the lesser of (a) the capacity
of the branch of the system serving the Premises exclusively or (b) Tenant’s
percentage of the capacity of the system serving the entire Building, Landlord
and Tenant agreeing that such capacity shall be allocated equally over the
entire rentable area of the Building.

6.2.5        INSTALLATION, ALTERATIONS OR ADDITIONS

.  Tenant shall not make any installations, alterations, additions or
improvements (collectively and individually referred to in this paragraph as
“work”) in, to or on the Premises, nor to permit the making of any holes in the
walls, partitions, ceilings or floors without on each occasion obtaining the
prior consent of Landlord (which consent shall not be unreasonably withheld,
conditioned, or delayed and which consent shall not be required with respect to
Permitted Work, as hereinafter defined), and then only pursuant to design
documentation approved by Landlord in advance in each instance in accordance
with Exhibit D.  “Permitted Work” shall be defined as work within the interior
of the portion of the Building contained within the Premises which: (i) is not
visible from the exterior of the Building, (ii) does not affect the roof,
structure of systems of the Building, (iii) costs $25,000.00 or less, (iv) which
are cosmetic in nature (i.e., wall coverings, floor coverings, painting), and
(v) of which Tenant has given Landlord at least five (5) days prior written
notice (which notice shall contain either plans and specifications or other
reasonable description of the work); provided, however, that such prior notice
shall not be required (a) in an emergency (it being agreed that Tenant shall
provide such notice as is reasonable thereafter), (b) for routine maintenance
and janitorial services that otherwise meet the requirements of this sentence,
or (c) for the installation of cosmetic alterations as set forth in subclause
(iv) above that otherwise meet the requirements of this sentence.  All work to
be performed to the Premises by Tenant shall (i) be performed in a good and
workmanlike manner by contractors approved in advance by Landlord and in
compliance with the provisions of Exhibit D and all applicable zoning, building,
fire, health and other codes, regulations, ordinances and laws, (ii) be made at
Tenant’s sole cost and expense and at such times and in such a manner as
Landlord may from time to time designate, and (iii) be free of liens and
encumbrances and become part of the Premises and the property of Landlord
without being deemed additional rent for tax purposes, Landlord and Tenant
agreeing that Tenant shall be treated as the owner of the work for tax purposes
until the expiration or earlier termination of the Term hereof, subject to
Landlord’s rights pursuant to Subsection 6.1.9 to require Tenant to remove the
same at or prior to the expiration or earlier termination of the Term hereof
and, to the extent Landlord shall make such election, title thereto shall remain
vested in Tenant at all times.  Tenant shall pay promptly when due the entire
cost of any work to the Premises so that the Premises, Building and Property
shall at all times be free of liens, and, at Landlord’s request, Tenant shall
furnish to Landlord a bond or other security acceptable to Landlord assuring
that any such work will be completed in accordance with the plans and
specifications theretofore approved by Landlord and assuring that the Premises
will remain free of any mechanics’ lien or other encumbrances that may arise out
of such work.  Prior to the commencement of any such work, and throughout and
until completion thereof, Tenant shall maintain, or cause to be maintained, the
insurance required by Exhibit E, all with coverage limits as stated therein or
such higher limits as shall be reasonably required by Landlord.  In addition,
Tenant shall save Landlord harmless and indemnified from all injury, loss,
claims or damage to any person or property occasioned by or arising out of such
work.  Whenever and as often as any mechanic’s or materialmen’s lien shall have
been filed against the Property based upon any act of Tenant or of anyone
claiming through Tenant, Tenant shall within seven (7) days of notice from
Landlord to Tenant take such action by bonding, deposit or payment as will
remove or satisfy the lien.  Tenant shall, upon request of Landlord, execute and
deliver to Landlord a bill of sale covering any work Tenant shall be required to
surrender hereunder.

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Tenant shall not, at any time, directly or indirectly, employ or permit the
employment of any contractor, mechanic or laborer in the Premises, if such
employment will interfere or cause any conflict with other contractors,
mechanics or laborers engaged in the construction, maintenance or operation of
the Building by Landlord, Tenant or others.  In the event of any such
interference or conflict, Tenant, upon demand of Landlord, shall cause all
contractors, vendors, mechanics or laborers causing such interference or
conflict to leave the Building immediately.

6.2.6        ABANDONMENT 

.  Tenant shall not abandon or vacate the Premises during the Term.

6.2.7        SIGNS 

.  Except for Tenant’s exterior signage rights under Section 10.11 hereof, and
signage approved by Landlord (which approval shall not be unreasonably withheld,
conditioned, or delayed), Tenant shall not paint or place any signs or place any
curtains, blinds, shades, awnings, aerials, or the like, visible from outside
the Premises without Landlord’s prior written approval, which approval shall not
be unreasonably withheld, conditioned, or delayed.  Landlord shall not
unreasonably withhold consent for signs or lettering on or adjacent to the entry
doors to the Premises provided such signs conform to building standards adopted
by Landlord and Tenant has submitted to Landlord a plan or sketch of the sign to
be placed on such entry doors.  Landlord agrees, however, to maintain a tenant
directory in the lobby of the Building in which will be placed Tenant’s name and
the location of the Premises in the Building.  All signs and directory listings
and any modifications thereto shall be at Tenant’s sole cost and expense. 
Tenant shall have the right to install an awning over the overhead door,
provided that: (i) Tenant obtains Landlord’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, (ii) Tenant
obtains all necessary governmental approvals with respect to such awning, (iii)
Tenant shall, throughout the Term, maintain the awning in good condition, and
(iv) upon the expiration or prior termination of the Term, Tenant shall remove
the awning and repair any damage to the Building caused by the installation or
removal of such awning.

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6.2.8        OIL AND HAZARDOUS MATERIALS

.  Tenant shall not introduce on or transfer to the Premises or Property, any
Hazardous Materials (as hereinafter defined) except for those materials which
are used in the normal course of Tenant’s business; and in the use, handling,
storage and disposal of the same, the Tenant shall comply with all applicable
Environmental Laws and with the standards provided therefor by the manufacturer
thereof.

            In no event shall Tenant be liable for Hazardous Materials which
exist at, in or under the Premises or Property as of the Date of this Lease; nor
dump, flush or otherwise dispose of any Hazardous Materials into the drainage,
sewage or waste disposal systems serving the Premises or Property; nor generate,
store, use, release, spill or dispose of any Hazardous Materials in or on the
Premises or the Property or transfer any Hazardous Materials from the Premises
to any other location; and Tenant shall not commit or suffer to be committed in
or on the Premises or Property any act which would require any reporting or
filing of any notice with any governmental agency pursuant to any statutes,
laws, codes, ordinances, rules or regulations, present or future, applicable to
the Property or to Hazardous Materials.  Notwithstanding the foregoing, Tenant
shall have the right to use Hazardous Materials which are required in the
ordinary course of Tenant’s business, provided that Tenant handles, transports,
stores, and uses the same in compliance with all applicable Environmental Laws
and manufacturers’ standards.

Tenant agrees that if it shall generate, store, release, spill, dispose of or
transfer to the Premises or Property any Hazardous Materials, it shall promptly
remove the same, at its sole cost and expense, in the manner provided by all
applicable Environmental Laws (as hereinafter defined), regardless of when such
Hazardous Materials shall be discovered.  Furthermore, Tenant shall pay any
fines, penalties or other assessments imposed by any governmental agency with
respect to any such Hazardous Materials and shall forthwith repair and restore
any portion of the Premises or Property which it shall disturb in so removing
any such Hazardous Materials to the condition which existed prior to Tenant’s
disturbance thereof.

Tenant agrees to deliver promptly to Landlord any notices, orders or similar
documents received from any governmental agency or official concerning any
violation of any Environmental Laws or with respect to any Hazardous Materials
affecting the Premises or Property.  In addition, Tenant shall, within ten (10)
days of receipt, accurately complete any questionnaires from Landlord or other
informational requests relating to Tenant’s use of the Premises and, in
particular, to Tenant’s use, generation, storage and/or disposal of Hazardous
Materials at, to, or from the Premises.

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Tenant shall indemnify, defend (by counsel satisfactory to Landlord), protect,
and hold Landlord free and harmless from and against any and all claims, or
threatened claims, including without limitation, claims for death of or injury
to any person or damage to any property, actions, administrative proceedings,
whether formal or informal, judgments, damages, punitive damages, liabilities,
penalties, fines, costs, taxes, assessments, forfeitures, losses, expenses,
reasonable attorneys’ fees and expenses, consultant fees, and expert fees to the
extent such claims arise from or are caused, directly or indirectly, by (i) the
presence or suspected presence in, on, under or about the Premises or discharge
in or from the Premises of any Hazardous Materials, or Tenant’s use, analysis,
storage, transportation, disposal, release, threatened release, discharge or
generation of Hazardous Materials to, in, on, under, about or from the Premises,
or (ii) Tenant’s failure to comply with any Environmental Laws.  Tenant’s
obligations hereunder shall include, without limitation, and whether foreseeable
or unforeseeable, all costs (including, without limitation, capital, operating
and maintenance costs) incurred in connection with any investigation or
monitoring of site conditions, repair, cleanup, containment, remedial, removal
or restoration work, or detoxification or decontamination of the Premises, and
the preparation and implementation of any closure, remedial action or other
required plans in connection therewith.  For purposes of this Subsection 6.2.8,
any acts or omissions of Tenant, or its subtenants or assignees or its or their
employees, agents, contractors or vendors (whether or not they are negligent,
intentional, willful or unlawful) shall be attributable to Tenant.

The term “Hazardous Materials” shall mean and include any petroleum, petroleum
products, asbestos, radioactive, biological, medical or infectious wastes or
materials, and any other wastes, materials and substances which are defined,
determined or identified as toxic or hazardous in any Environmental Laws, or in
any judicial or administrative interpretation of Environmental Laws.

“Environmental Laws” shall mean any and all federal, state and municipal
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
codes, plans, injunctions, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, medical, biological, infectious, toxic or hazardous
substances or wastes into the environment including, without limitation, ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, medical, biological, infectious, toxic or hazardous substances or
wastes or the cleanup or other remediation thereof.

ARTICLE 7
CASUALTY OR TAKING

7.1              TERMINATION 

 Rights.   

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A.        Landlord’s Rights.  In the event that the Premises or the Property, or
any material part thereof shall be destroyed or damaged by fire or casualty,
shall be taken by any public authority or for any public use or shall be
condemned by the action of any public authority, then the Term of this Lease may
be terminated at the election of  Landlord.  Such election, which may be made
notwithstanding the fact that Landlord’s entire interest may have been divested,
shall be made by the giving of notice to the other party within sixty (60) days
after the date of the taking or casualty.      

7.2       Tenant’s Rights. In the event that (i) at least twenty-five percent
(25%) of the rentable area of the Premises is damaged by fire or other casualty
to such an extent that the time reasonably necessary for Landlord to make
repairs as required in the ordinary course shall exceed the lesser of six (6)
months or that period of time equal to one-half of the then remainder of the
Term of this Lease as of the date of fire or other casualty or (ii) at least
twenty-five percent (25%) of the rentable area of the Premises or reasonable
access to the Premises is damaged by fire or other casualty and repairs are not
substantially completed (or reasonable access restored within six (6) months
from the date of the fire or other casualty, or (iii) at least twenty-five (25%)
of the rentable area of the Premises is taken by an exercise of eminent domain,
then in any such case Tenant shall have the right to terminate the Term of this
Lease by giving notice of its desire to do so to Landlord within thirty (30)
days after, in the first or third case, such damage or taking, and in the second
case, the expiration of such six-(6)-month period, whereupon on the date thirty
(30) days after the giving of such notice, the Term of this Lease shall
terminate with the same force and effect as if such date were the date on which
the Term of this Lease were scheduled to expire.  Notwithstanding the foregoing
to the contrary, Tenant shall have not right to terminate the Term of this Lease
due to a fire or other casualty if the cause thereof was due to the negligence
of other wrongful conduct of Tenant or any subtenant or assignee or any agent,
employee or invitee of any of the foregoing.  

7.2              RESTORATION 

.  If the Landlord and Tenant do not elect to so terminate, this Lease shall
continue in force and (so long as the damage is not caused by the negligence or
other wrongful act of Tenant or its employees, agents, contractors, vendors or
invitees) a just proportion of the Annual Fixed Rent reserved, according to the
nature and extent of the damages sustained by the Premises, shall be suspended
or abated until the Premises (excluding any improvements to the Premises made at
Tenant’s expense), or what may remain thereof, shall be put by Landlord in
proper condition for use, which Landlord covenants to do with reasonable
diligence to the extent permitted by the net proceeds of insurance recovered or
damages awarded for such destruction, taking, or condemnation and subject to
zoning and building laws or ordinances then in existence. After any such
casualty, Tenant shall remove from the Premises as promptly as reasonably
possible, all of Tenant’s salvageable equipment, furniture and other property. 
Tenant acknowledges that Landlord will not carry insurance on Tenant’s furniture
and/or furnishing or any fixtures or equipment, improvements, alterations or
appurtenances and agrees that Landlord will not be obligated to repair any
damage thereto or replace the same.  Tenant hereby waives the provisions of
Section 227 of the Real Property Law and agrees that the provisions of this
Article 7 shall govern and control in lieu thereof.  “Net proceeds of insurance
recovered or damages awarded” refers to the gross amount of such insurance or
damages actually made available to Landlord (and not retained by any Superior
Lessor or Superior Mortgagee) less the reasonable expenses of Landlord incurred
in connection with the collection of the same, including without limitation,
fees and expenses for legal and appraisal services.

 

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7.3              AWARD 

.  Irrespective of the form in which recovery may be had by law, all rights to
seek reimbursement for damages or compensation arising from fire or other
casualty or any taking by eminent domain or condemnation shall belong to
Landlord in all cases.  Tenant hereby grants to Landlord all of Tenant’s rights
to such claims for damages and compensation and covenants to deliver such
further assignments thereof as Landlord may from time to time request.  Nothing
contained herein shall be construed to prevent Tenant from prosecuting in any
condemnation proceedings a claim for relocation expenses, provided that such
action shall not affect the amount of compensation otherwise recoverable by
Landlord from the taking authority.

ARTICLE 8
DEFAULTS

8.1              DEFAULT OF TENANT

.  (a) (I) If Tenant shall default in its obligations to pay the Annual Fixed
Rent or Additional Rent or any other charges or amounts under this Lease when
due or shall default in complying with its obligations under Subsection 6.1.11
of this Lease and if any such default shall continue for ten (10) days after
written notice from Landlord designating such default, or (II) if as promptly as
possible but in any event within thirty (30) days after notice from Landlord to
Tenant specifying any default or defaults other than those set forth in clause
(I) Tenant has not cured the default or defaults so specified; or (b) if any
assignment shall be made by Tenant for the benefit of creditors; or (c) if
Tenant’s leasehold interest shall be taken on execution; or (d) if a lien or
other involuntary encumbrance shall be filed against Tenant’s leasehold interest
or Tenant’s other property, including said leasehold interest, and shall not be
discharged within ten (10) days thereafter; or (e) if a petition shall be filed
by Tenant for liquidation, or for reorganization or an arrangement under any
provision of any bankruptcy law or code as then in force and effect; or (f) if
an involuntary petition under any of the provisions of any bankruptcy law or
code shall be filed against Tenant and such involuntary petition shall not be
dismissed within thirty (30) days thereafter; or (g) if a custodian or similar
agent shall be authorized or appointed to take charge of all or substantially
all of the assets of Tenant; or (h) if Tenant dissolves or shall be dissolved or
shall liquidate or shall adopt any plan or commence any proceeding, the result
of which is intended to include dissolution or liquidation; or (i) if any order
shall be entered in any proceeding by or against Tenant decreeing or permitting
the dissolution of Tenant or the winding up of its affairs; or (j) if Tenant
shall fail to pay any installment of Annual Fixed Rent or Additional Rent when
due, Tenant shall cure such default within the grace period provided in clause
(a) (I) above (or with Landlord’s approval after the expiration of such grace
period) and Tenant shall, within the next year following the date such initial
defaulted payment was first due, fail more than once to pay any installment of
Annual Fixed Rent or Additional Rent when due, then, and in any of such cases
indicated in clauses (a) through (j) hereof (collectively and individually, a
“Default of Tenant”), Landlord may, in addition to and not in derogation of any
remedies for any preceding breach of covenant, immediately or at any time
thereafter give notice to Tenant terminating this Lease and the Term hereof,
which notice shall specify the date of termination, whereupon on the date so
specified, the Term of this Lease and all of Tenant’s rights and privileges
under this Lease shall expire and terminate but Tenant shall remain liable as
hereinafter provided.

8.2              REMEDIES 

.  In the event of any termination pursuant to Section 8.1, Tenant shall pay the
Annual Fixed Rent, Additional Rent and other charges payable hereunder up to the
time of such termination.  Thereafter, whether or not the Premises shall have
been re‑let, Tenant shall be liable to Landlord for, and shall pay to Landlord
the Annual Fixed Rent, Additional Rent and other charges which would be payable
hereunder for the remainder of the Term of this Lease had such termination not
occurred, less the net proceeds, if any, of any reletting of the Premises, after
deducting all expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage commissions, attorneys’ fees and
expenses, advertising costs, administration expenses, alteration costs, the
value of any tenant inducements (including but without limitation free rent,
moving costs, and contributions toward leasehold improvements) and any other
expenses incurred in preparation for such reletting.  Tenant shall pay such
damages to Landlord monthly on the days on which the Annual Fixed Rent,
Additional Rent or other charges would have been payable hereunder if the Term
of this Lease had not been so terminated.

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At any time after such termination, in lieu of recovering damages pursuant to
the provisions of the immediately preceding paragraph with respect to any period
after the date of demand therefor, at Landlord’s election, Tenant shall pay to
Landlord the greater of (i) the amount, if any, by which (A) the Annual Fixed
Rent, Additional Rent and other charges which would be payable hereunder from
the date of such demand to the end of what would be the then unexpired Term of
this Lease had such termination not occurred, shall exceed (B) the then fair
rental value of the Premises for the same period, reduced to amortize over such
period all costs or expenses which Landlord would incur to obtain such fair
market rent, or (ii) an amount equal to the lesser of (x) the Annual Fixed Rent,
Additional Rent and other charges that would have been payable for the remainder
of the Term of this Lease had such termination not occurred or (y) the aggregate
of the Annual Fixed Rent, Additional Rent and other charges accrued in the
twelve (12) months ended next prior to such termination (without reduction for
any free rent or other concession or abatement) except that in the event the
Term of this Lease is so terminated prior to the expiration of the first full
year of the Term of this Lease, the damages which Landlord may elect to recover
pursuant to clause (ii) (y) of this paragraph shall be calculated as if such
termination had occurred on the first anniversary of the Rent Commencement Date
and there had been no so-called free rent or other rental concession or any
rental abatement.

Nothing contained in this Lease shall, however, limit or prejudice the right of
Landlord to prove for and obtain in proceedings for bankruptcy or insolvency 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 be
greater than, equal to, or less than the amount of the loss or damages referred
to above.

In case of any Default of Tenant, re-entry, expiration and repossession by
summary proceedings or otherwise, Landlord may (i) relet 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 equal to or less than or exceed the
period which would otherwise have constituted the balance of the Term of this
Lease and may grant concessions or free rent to the extent that Landlord
considers advisable and necessary to relet the same and (ii) may make such
alterations, repairs and decorations in the Premises as Landlord in its sole
judgment considers advisable and necessary for the purpose of reletting the
Premises; and the making of such alterations, repairs and decorations shall not
operate or be construed to release Tenant from liability hereunder as
aforesaid.  Landlord shall in no event be liable in any way whatsoever for
failure to relet the Premises, or, in the event that the Premises are relet, for
failure to collect the rent under such reletting.

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To the fullest extent permitted by law, Tenant hereby expressly waives any and
all rights of redemption granted under any present or future laws in the event
of Tenant being evicted or dispossessed, or in the event of Landlord obtaining
possession of the Premises, by reason of the violation by Tenant of any of the
covenants and conditions of this Lease.  Without limiting the foregoing, Tenant
hereby expressly waives, so far as permitted by law, the service of any notice
of intention to re-enter provided for in any statute, or of the institution of
legal proceedings to that end, and Tenant, for and on behalf of itself and all
persons claiming through or under Tenant also waives any and all rights of
redemption or re-entry or repossession under present or future laws, including
specifically but without limitation, Section 761 of the New York Real Property
Actions and Proceeding Law including any amendments hereafter made thereto, and
Tenant further waives any and all rights to restore the operation of this Lease
and further waives any right under Article 63 of the Civil Practice Law and
Rules.  The terms “enter,” “entry,” or “re-entry” as used in this Lease are not
restricted to their technical legal meaning.

8.3              REMEDIES CUMULATIVE

.  Except as expressly provided otherwise in Section 8.2, any and all rights and
remedies which Landlord may have under this Lease, and at law and equity
(including without limitation actions at law for direct, indirect, special and
consequential (foreseeable and unforeseeable) damages, for Tenant’s failure to
comply with its obligations under this Lease shall be cumulative and shall not
be deemed inconsistent with each other, and any two or more of all such rights
and remedies may be exercised at the same time insofar as permitted by law.

8.4              LANDLORD’S RIGHT TO CURE DEFAULTS

.  At any time with or without notice, Landlord shall have the right, but shall
not be required, to pay such sums or do any act which requires the expenditure
of monies which may be necessary or appropriate by reason of the failure or
neglect of Tenant to comply with any of its obligations under this Lease
(irrespective of whether the same shall have ripened into a Default of Tenant),
and in the event of the exercise of such right by Landlord, Tenant agrees to pay
to Landlord forthwith upon demand, as Additional Rent, all such sums including
reasonable attorneys fees, together with interest thereon at a rate (the
“Default Rate”) equal to the lesser of five percent (5%) over the Prime Rate or
the maximum rate allowed by law.  “Prime Rate” shall mean the annual floating
rate of interest, determined daily and expressed as a percentage from time to
time announced by Citibank, N.A. as its “prime” or “base” rate, so-called, or if
at any time Citibank, N.A. ceases to announce such a rate, as announced by the
largest national or state-chartered banking institution having its principal
offices in New York City and announcing such a rate. If, at any time, neither
Citibank, N.A. nor the largest national or state-chartered banking institution
having its principal offices in New York City is announcing such a floating
rate, “Prime Rate” shall mean a rate of interest, determined daily, which is two
hundred (200) basis points above the fourteen-(14)-day moving average closing
trading price of ninety-(90)-day U.S. Treasury Bills.

8.5              HOLDING OVER

.  Any holding over by Tenant after the expiration or early termination of the
Term of this Lease shall be treated as a daily tenancy at sufferance at a rate
equal to one and a half (1 ½) times the greater of (x) the fair market rental
value for the Premises on a month-to-month basis or (y) the sum of the Annual
Fixed Rent plus Additional Rent in effect immediately prior to the expiration or
earlier termination of the Term.  Tenant shall also pay to Landlord all damages,
direct and/or consequential (foreseeable and unforeseeable), sustained by reason
of any such holding over.  Otherwise, all of the covenants, agreements and
obligations of Tenant applicable during the Term of this Lease shall apply and
be performed by Tenant during such period of holding over as if such period were
part of the Term of this Lease.

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8.6              EFFECT OF WAIVERS OF DEFAULT

.  Any consent or permission by Landlord to any act or omission by Tenant shall
not be deemed to be consent or permission by Landlord to any other similar or
dissimilar act or omission and any such consent or permission in one instance
shall not be deemed to be consent or permission in any other instance.

8.7              NO WAIVER, ETC

.  The failure of Landlord or Tenant to seek redress for violation of, or to
insist upon the strict performance of, any covenant or condition of this Lease
shall not be deemed a waiver of such violation nor prevent a subsequent act,
which would have originally constituted a violation, from having all the force
and effect of an original violation.  The receipt by Landlord of rent with
knowledge of the breach of any covenant of this Lease shall not be deemed to
have been a waiver of such breach by Landlord, or by Tenant, unless such waiver
be in writing signed by the party to be charged.  No consent or waiver, express
or implied, by Landlord or Tenant to or of any breach of any agreement or duty
shall be construed as a waiver or consent to or of any other breach of the same
or any other agreement or duty.

8.8              NO ACCORD AND SATISFACTION

.  No acceptance by Landlord of a lesser sum than the Annual Fixed Rent,
Additional Rent or any other charge then due shall be deemed to be other than on
account of the earliest installment of such rent or charge due, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent or other charge be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord’s right
to recover the balance of such installment or pursue any other remedy in this
Lease provided.

ARTICLE 9
RIGHTS OF HOLDERS

9.1              RIGHTS OF MORTGAGEES OR GROUND LESSOR

.  This Lease, and all rights of Tenant hereunder, are and shall be subject and
subordinate to any ground or master lease, and all renewals, extensions,
modifications and replacements thereof, and to all mortgages, which may now or
hereafter affect the Building or the Property and/or any such lease, whether or
not such mortgages shall also cover other lands and/or buildings and/or leases,
to each and every advance made or hereafter to be made under such mortgages, and
to all renewals, modifications, replacements and extensions of such leases and
such mortgages and all consolidations of such mortgages.  This Section shall be
self-operative and no further instrument of subordination shall be required.  In
confirmation of such subordination, Tenant shall promptly execute, acknowledge
and deliver any instrument that Landlord, the lessor under any such lease or the
holder of any such mortgage or any of their respective successors in interest
may reasonably request to evidence such subordination.  Any lease to which this
Lease is subject and subordinate is herein called “Superior Lease” and the
lessor of a Superior Lease or its successor in interest, at the time referred
to, is herein called “Superior Lessor”; and any mortgage to which this Lease is
subject and subordinate, is herein called “Superior Mortgage” and the holder of
a Superior Mortgage is herein called “Superior Mortgagee”. 

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If any Superior Lessor or Superior Mortgagee or the nominee or designee of any
Superior Lessor or Superior Mortgagee shall succeed to the rights of Landlord
under this Lease, whether through possession or foreclosure action or delivery
of a new lease or deed, or otherwise, then at the request of such party so
succeeding to Landlord’s rights (herein called “Successor Landlord”) and upon
such Successor Landlord’s written agreement to accept Tenant’s attornment,
Tenant shall attorn to and recognize such Successor Landlord as Tenant’s
landlord under this Lease and shall promptly execute and deliver any instrument
that such Successor Landlord may reasonably request to evidence such
attornment.  Upon such attornment, this Lease shall continue in full force and
effect as a direct lease between the Successor Landlord and Tenant upon all of
the terms, conditions and covenants as are set forth in this Lease, except that
the Successor Landlord (unless formerly the landlord under this Lease) shall not
be (a) liable in any way to Tenant for any act or omission, neglect or default
on the part of Landlord under this Lease, (b) responsible for any monies owing
by or on deposit with Landlord to the credit of Tenant, (c) subject to any
counterclaim or setoff which theretofore accrued to Tenant against Landlord, (d)
bound by any modification of this Lease subsequent to such Superior Lease or
Superior Mortgage, or by any previous prepayment of Annual Fixed Rent or
Additional Rent for more than one (1) month, which was not approved in writing
by the Successor Landlord, (e) liable to the Tenant beyond the Successor
Landlord’s interest in the Property, (f) responsible for the performance of any
work to be done by Landlord under this Lease to render the Premises ready for
occupancy by the Tenant, or (g) required to remove any person occupying the
Premises or any part thereof, except if such person claims by, through or under
the Successor Landlord.  Tenant agrees at any time and from time to time to
execute a suitable instrument in confirmation of Tenant’s agreement to attorn,
as aforesaid.

9.2              MODIFICATIONS 

.  If any Superior Lessor or Superior Mortgagee shall require any
modification(s) of this Lease, Tenant shall, at Landlord’s request, promptly
execute and deliver to Landlord such instruments effecting such modification(s)
as Landlord shall require, provided that such modification(s) do not adversely
affect in any material respect any of Tenant’s rights under this Lease.  In
addition, and notwithstanding Section 9.1 to the contrary, any Superior Lessor
or Superior Mortgagee may, at its option, subordinate the Superior Lease or
Superior Mortgage of which it is the lessor or holder to this Lease by giving
Tenant ten (10) days prior written notice of such election, whereupon this Lease
shall, irrespective of dates of execution, delivery and recording, be superior
to such Superior Lease or Superior Mortgage and no other documentation shall be
necessary to effect such change.

9.3              SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT

.  At Tenant’s request, Landlord shall use commercially reasonable efforts
(without the obligation to incur expense or liability in connection with such
efforts) to obtain a so-called non-disturbance agreement from any such Superior
Lessor or Superior Mortgagee which agreement may be in the form customarily used
by such Superior Lessor or Superior Mortgagee, or if no such form exists, in any
commercially reasonable form, subject to the conditions and limitations of
Sections 9.1 and 9.2, provided, however, that if, despite such commercially
reasonable efforts, Landlord is unable to obtain such agreement, such failure
shall not constitute a default by Landlord under this Lease.

 

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ARTICLE 10
MISCELLANEOUS PROVISIONS

10.1          NOTICES 

.  Except as may be expressly provided herein otherwise, all notices, requests,
demands, consents, approval or other communications to or upon the respective
parties hereto shall be in writing, shall be delivered by hand or mailed by
certified or registered mail, return receipt requested, or by a nationally
recognized courier service that provides a receipt for delivery such as Federal
Express, United Parcel Service or U.S. Postal Service Express Mail and shall be
addressed as follows:  If intended for Landlord, to the Original Addresses of
Landlord set forth in Section 1.1 of this Lease (or to such other address or
addresses as may from time to time hereafter be designated by Landlord by notice
to Tenant);and if intended for Tenant, addressed to Tenant at the Original
Address of Tenant set forth in Section 1.1 of this Lease until the date on which
Tenant occupies the Premises for business purposes and thereafter to the
Property (or to such other address or addresses as may from time to time
hereafter be designated by Tenant by notice to Landlord).  Notices shall be
effective on the date delivered to (or the first date such delivery is attempted
and refused by) the party to which such notice is required or permitted to be
given or made under this Lease.  Notices from Landlord may be given by
Landlord’s Agent, if any, or Landlord’s attorney.

10.2          QUIET ENJOYMENT; LANDLORD’S RIGHT TO MAKE ALTERATIONS, ETC

.  Landlord agrees that upon Tenant’s paying the rent and performing and
observing the agreements, conditions and other provisions on its part to be
performed and observed, Tenant shall and may peaceably and quietly have, hold
and enjoy the Premises during the Term hereof without any manner of hindrance or
molestation from Landlord or anyone claiming under Landlord, subject, however,
to the terms of this Lease; provided however, that Landlord reserves the right
at any time and from time to time, without the same constituting breach of
Landlord’s covenant of quiet enjoyment or an actual or constructive eviction,
and without Landlord incurring any liability to Tenant or otherwise affecting
Tenant’s obligations under this Lease, to make such changes, alterations,
improvements, repairs or replacements in or to the interior and exterior of the
Building (including the Premises) and the fixtures and equipment thereof, and in
or to the Property, or properties adjacent thereto, as Landlord may deem
necessary or desirable, and to change (provided that there be no unreasonable
obstruction of the right of access to the Premises by Tenant and that Landlord
use commercially reasonable efforts to minimize, to the extent practical, any
interference with the conduct of business at the Premises) the arrangement
and/or location of entrances or passageways, doors and doorways, corridors,
elevators, or other common areas of the Building and Property, except that,
prior to the date that Tenant occupies and leases one hundred (100%) percent of
the Building, Landlord may exercise its rights under this Section 10.2, only:
(i) in order to make alterations, additions and improvements required by
applicable laws, ordinances or regulations, or (ii) in connection with the
exercise by Landlord of its rights or obligations under this Lease.

Without incurring any liability to Tenant, Landlord may permit access to the
Premises and open the same, whether or not Tenant shall be present, upon any
demand of any receiver, trustee, assignee for the benefit of creditors, sheriff,
marshal or court officer Landlord reasonably believes is entitled to such access
for the purpose of taking possession of, or removing, Tenant’s property or for
any other lawful purpose (but this provision and any action by Landlord
hereunder shall not be deemed a recognition by Landlord that the person or
official making such demand has any right or interest in or to this Lease, or in
or to the Premises), or upon demand of any representative of the fire, police,
building, sanitation or other department of the city, state or federal
governments.

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10.3          LEASE NOT TO BE RECORDED; CONFIDENTIALITY OF LEASE TERMS

.  Tenant agrees that it will not record this Lease.  Both parties shall, upon
the request of either (and at the expense of the requesting party), execute and
deliver a notice or short form of this Lease in such form, if any, as may be
acceptable for recording with the land records of the governmental entity
responsible for keeping such records for the Town of Brighton, New York.  In no
event shall such document set forth the rent or other charges payable by Tenant
pursuant to this Lease; and any such document shall expressly state that it is
executed pursuant to the provisions contained in this Lease and is not intended
to vary the terms and conditions of this Lease.

Tenant acknowledges that the terms under which the Landlord has leased the
Premises to Tenant (including, without limitation, the rental rate(s), term and
other financial and business terms), constitute confidential information of
Landlord (“Confidential Information”).  Tenant covenants and agrees to keep the
Confidential Information confidential and not to disclose the same to third
parties; provided, however, that such Confidential Information may be disclosed
by Tenant as is required, by law, of a publicly traded company and to those of
its officers, employees, attorneys, accountants, lenders and financial advisors
(collectively, “Representatives”) who need to know such information in
connection with Tenant’s use and occupancy of the Premises and for financial
reporting and credit related activities.  Tenant shall not make or permit to be
made any press release or other similar public statement regarding this Lease
without the prior approval of Landlord, which approval shall not be unreasonably
withheld.  Tenant furthermore agrees to inform its Representatives of the
confidential nature of such Confidential Information and to use all reasonable
efforts to cause each Representative to treat such Confidential Information
confidentially and in accordance with the terms of this paragraph.

10.4          ASSIGNMENT OF RENTS AND TRANSFER OF TITLE; LIMITATION OF
LANDLORD’S LIABILITY

.  Tenant agrees that the assignment by Landlord of Landlord’s interest in this
Lease, or the rents payable hereunder, whether absolute or conditional in nature
or otherwise, which assignment is made to the holder of a mortgage on property
which includes the Premises, shall never be treated as an assumption by such
holder of any of the obligations of Landlord hereunder unless such holder shall,
by notice sent to Tenant, specifically otherwise elect and that, except as
aforesaid, such holder shall be treated as having assumed Landlord’s obligations
hereunder (subject to the limitations set forth in Section 9.1) only upon
foreclosure of such holder’s mortgage and the taking of possession of the
Premises.

The term “Landlord”, so far as covenants or obligations to be performed by
Landlord are concerned, shall be limited to mean and include only the owner or
owners at the time in question of Landlord’s interest in the Property, and in
the event of any transfer or transfers of such title to said property, Landlord
(and in case of any subsequent transfers or conveyances, the then grantor) shall
be concurrently freed and relieved from and after the date of such transfer or
conveyance, without any further instrument or agreement, of all liability with
respect to the performance of any covenants or obligations on the part of
Landlord contained in this Lease thereafter to be performed, it being intended
hereby that the covenants and obligations contained in this Lease on the part of
Landlord, shall, subject as aforesaid, be binding on Landlord, its successors
and assigns, only during and in respect of their respective period of ownership
of such interest in the Property.

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Notwithstanding the foregoing, in no event shall the acquisition of Landlord’s
interest in the Property by a purchaser which, simultaneously therewith, leases
Landlord’s entire interest in the Property back to Landlord or the seller
thereof be treated as an assumption by operation of law or otherwise, of
Landlord’s obligations hereunder.  Tenant shall look solely to such
seller-lessee, and its successors from time to time in title, for performance of
Landlord’s obligations hereunder.  The seller-lessee, and its successors in
title, shall be the Landlord hereunder unless and until such purchaser expressly
assumes in writing the Landlord’s obligations hereunder.

Tenant shall not assert nor seek to enforce any claim for breach of this Lease
against any of Landlord’s assets other than Landlord’s interest in the Property,
and Tenant agrees to look solely to such interest for the satisfaction of any
liability or claim against Landlord under this Lease, it being specifically
agreed that in no event whatsoever shall Landlord ever be personally liable for
any such liability.  In addition, Landlord hereby notifies Tenant that the
Declaration of Trust of Hub Properties Trust provides, and Tenant  agrees that
no trustee, officer, director, general or limited partner, member, shareholder,
beneficiary, employee or agent of Landlord (including any person or entity from
time to time engaged to supervise and/or manage the operation of Landlord) shall
be held to any liability, jointly or severally, for any debt, claim, demand,
judgment, decree, liability or obligation of any kind (in tort, contract or
otherwise) of, against or with respect to Landlord or arising out of any action
taken or omitted for or on behalf of Landlord.

10.5          LANDLORD’S DEFAULT

.  Landlord shall not be deemed to be in breach of, or in default in the
performance of, any of its obligations under this Lease unless it shall fail to
perform such obligation(s) and such failure shall continue for a period of
thirty (30) days, or such additional time as is reasonably required to correct
any such breach or default, after written notice has been given by Tenant to
Landlord specifying the nature of Landlord’s alleged breach or default.  Tenant
shall have no right to terminate this Lease for any breach or default by
Landlord hereunder and no right, for any such breach or default, to offset or
counterclaim against any rent due hereunder.  In no event shall Landlord ever be
liable to Tenant for any punitive damages or for any loss of business or any
other indirect, special or consequential damages suffered by Tenant from
whatever cause.  Tenant further agrees that if Landlord shall have failed to
cure any such breach or default within thirty (30) days of such notice to
Landlord (or if such breach or default cannot be cured within said time, then
within such additional time as may be necessary if within said thirty days
Landlord has commenced and is diligently pursuing the remedies necessary to cure
such breach or default), then the holder(s) of any mortgage(s) or the lessor
under any ground lease entitled to notice pursuant to Section 10.6 shall have an
additional thirty (30) days within which to cure such breach or default if such
breach or default cannot be cured within that time, then such additional time as
may be necessary, if within such thirty (30) days any such holder or lessor has
commenced and is diligently pursuing the remedies necessary to cure such breach
or default (including but not limited to commencement of foreclosure
proceedings, if necessary to effect such cure).

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Where provision is made in this Lease for Landlord’s consent and Tenant shall
request such consent and Landlord shall fail or refuse to give or shall delay in
giving such consent, Tenant shall not be entitled to any damages and Tenant
hereby waives any claim based on such failure, refusal or delay; provided
however in any situation where Landlord is expressly required not to withhold
its consent unreasonably Tenant shall (at its sole remedy) be entitled to bring
an action for specific performance or injunction.

10.6          NOTICE TO MORTGAGEE AND GROUND LESSOR

.  After receiving notice from any party that it holds a mortgage which includes
the Premises as part of the mortgaged premises, or that it is the ground lessor
under a lease with Landlord, as ground lessee, which includes the Premises as
part of the demised premises, no notice from Tenant to Landlord shall be
effective unless and until a copy of the same is given to such holder or ground
lessor, and the curing of any of Landlord’s defaults by such holder or ground
lessor shall be treated as performance by Landlord.

10.7          BROKERAGE 

.  Tenant warrants and represents that it has dealt with no broker in connection
with the consummation of this Lease, other than CB Richard Ellis (Tenant’s
Broker) and Moore Corporate Real Estate, Inc. (Landlord’s Broker) (collectively,
the “Brokers”), and in the event of any brokerage claims or liens, other than by
Brokers, against Landlord or the Property predicated upon or arising out of
prior dealings with Tenant, Tenant agrees to defend the same and indemnify and
hold Landlord harmless against any such claim, and to discharge any such lien.

10.8          WAIVER OF JURY TRIAL

.  LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER IN CONNECTION WITH THIS
LEASE.

10.9          APPLICABLE LAW AND CONSTRUCTION

.  This Lease shall be governed by and construed in accordance with the laws of
the state or district in which the Property is located and if any provisions of
this Lease shall to any extent be invalid, the remainder of this Lease shall not
be affected thereby.  Tenant expressly acknowledges and agrees that Landlord has
not made and is not making, and Tenant, in executing and delivering this Lease,
is not relying upon, any warranties, representations, promises or statements,
except to the extent that the same are expressly set forth in this Lease or in
any other written agreement which may be made between the parties concurrently
with the execution and delivery of this Lease and which shall expressly refer to
this Lease.  All understandings and agreements heretofore made between the
parties are merged in this Lease and any other such written agreement(s) made
concurrently herewith, which alone fully and completely express the agreement of
the parties and which are entered into after full investigation, neither party
relying upon any statement or representation not embodied in this Lease or any
other such written agreement(s) made concurrently herewith.  This Lease may be
amended, and the provisions hereof may be waived or modified, only by
instruments in writing executed by Landlord and Tenant.  The titles of the
several Articles and Sections contained herein are for convenience only and
shall not be considered in construing this Lease.  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 Tenant shall have no right
to the Premises hereunder until the execution and delivery hereof by both
Landlord and Tenant.  Except as herein otherwise provided, the terms hereof
shall be binding upon and shall inure to the benefit of the successors and
assigns, respectively, of Landlord and Tenant and, if Tenant shall be an
individual, upon and to his heirs, executors, administrators, successors and
assigns.  If two or more persons or parties are named as Tenant herein, (i) each
of such persons or parties shall be jointly and severally liable for the
obligations of the Tenant hereunder, and Landlord may proceed against any one
without first having commenced proceedings against any other of them and (ii)
Landlord may require that all notices, requests, demands, consents, approvals or
other communications delivered by Tenant under the Lease must be executed by
each person or party named as Tenant herein.  Each term and each provision of
this Lease to be performed by Tenant shall be construed to be both an
independent covenant and a condition and time is of the essence with respect to
the exercise of any of Tenant’s rights under this Lease.  The reference
contained to successors and assigns of Tenant is not intended to constitute a
consent to assignment by Tenant.  Except as otherwise set forth in this Lease,
any obligations of Tenant (including, without limitation, rental and other
monetary obligations, repair and maintenance obligations and obligations to
indemnify Landlord), shall survive the expiration or earlier termination of this
Lease, and Tenant shall immediately reimburse Landlord for any expense incurred
by Landlord in curing Tenant’s failure to satisfy any such obligation
(notwithstanding the fact that such cure might be effected by Landlord following
the expiration or earlier termination of this Lease).

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10.10      PARKING. 

(A)                TENANT AND TENANT’S EMPLOYEES SHALL HAVE THE RIGHT TO PARK
VEHICLES IN THE SURFACE PARKING LOT (THE “PARKING FACILITY”) APPURTENANT TO THE
BUILDING.  TENANT SHALL HAVE THE RIGHT TO USE SIX (6) PARKING SPACES PER 1,000
SQUARE FEET OF PREMISES RENTABLE AREA. 

(B)               TENANT SHALL USE ITS PARKING SPACES IN THE PARKING FACILITY
FOR THE PARKING OF PASSENGER VEHICLES OF TENANT AND ITS EMPLOYEES ONLY.  FOR SO
LONG AS TENANT LEASES AND OCCUPIES ONE HUNDRED (100%) PERCENT OF THE BUILDING,
TENANT SHALL HAVE THE RIGHT TO LEAVE VEHICLES IN THE PARKING FACILITY ADJACENT
TO THE PREMISES OVERNIGHT, PROVIDED THAT FROM AND AFTER THE DATE THAT TENANT NO
LONGER LEASES AND OCCUPIES ONE HUNDRED (100%) PERCENT OF THE BUILDING, TENANT
SHALL HAVE THE RIGHT TO LEAVE VEHICLES IN THE PARKING FACILITY ADJACENT TO THE
PREMISES, EXCEPT TO THE EXTENT THAT SUCH OVERNIGHT PARKING WOULD INTERFERE WITH
OVERNIGHT SNOW REMOVAL FROM THE PARKING FACILITY.

(C)                LANDLORD RESERVES THE RIGHT TO IMPLEMENT SYSTEMS TO REGULATE
ACCESS TO AND USE OF THE PARKING FACILITY, INCLUDING, WITHOUT LIMITATION,
PARKING PASSES, PARKING STICKERS, AND CARD KEY ACCESS, OR ANY OTHER SYSTEM
REASONABLY DESIGNATED BY LANDLORD.

(D)               TENANT ACKNOWLEDGES THAT LANDLORD IS NOT REQUIRED TO PROVIDE
ANY SECURITY OR SECURITY SERVICES FOR THE PARKING FACILITY.  ALL OF THE
VEHICLES, AND THE CONTENTS THEREOF, IN THE PARKING FACILITY SHALL BE AT THE SOLE
RISK AND HAZARD OF THE OWNER THEREOF.

(E)                TENANT HEREBY INDEMNIFIES AND SHALL HOLD LANDLORD HARMLESS
FROM AND AGAINST ALL CLAIMS, LOSS, COST, OR DAMAGE ARISING OUT OF THE USE BY
TENANT AND ITS EMPLOYEES AND INVITEES OF THE PARKING FACILITY EXCEPT TO THE
EXTENT CAUSED BY LANDLORD’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

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(F)                LANDLORD RESERVES THE RIGHT TO DESIGNATE RESERVED AND
UNRESERVED PARKING AREAS WITHIN THE PARKING FACILITY, TO CHANGE ENTRANCES OR
EXITS AND ALTER TRAFFIC FLOW WITHIN THE PARKING FACILITY, AND TO MODIFY THE
PARKING FACILITY TO ANY EXTENT. 

(G)               TENANT SHALL CAUSE ITS EMPLOYEES AND INVITEES TO COMPLY WITH
ALL RULES AND REGULATIONS PERTAINING TO THE PARKING FACILITY ESTABLISHED BY
LANDLORD.

10.11      EXTERIOR SIGNAGE

.  Notwithstanding to the contrary set forth in the Lease, provided Tenant is
then in compliance with the below-listed conditions, Tenant shall have the
non-exclusive right at its sole cost and expense, to install, maintain, repair
and replace two (2) tenant identification signs consisting of the name of Tenant
(the “Exterior Signage”) (which shall be for the exclusive use of Tenant) on the
exterior of the Building, with exposure to Brighton-Henrietta Townline Road, and
also on the front of the Building, in locations acceptable to Landlord, provided
that (a) no monetary Default of Tenant has occurred hereunder and is then
continuing, (b) such Exterior Signage is in compliance with all applicable laws,
codes and ordinances, and Tenant has obtained all governmental permits and
approvals required in connection therewith,, and (c) if Tenant no longer leases
the Warehouse Premises, Tenant shall no longer have the right to maintain
signage on the exterior of the Building adjacent to the Warehouse Premises, and
Tenant shall remove any signage which it has installed on the exterior of the
Building adjacent to the Warehouse Premises and shall repair any damage to the
Building caused by the installation or removal of such signage.  The size and
the appearance of the Exterior Signage shall be subject to the prior approval of
Landlord, which approval shall not unreasonably be withheld, conditioned or
delayed.  The installation, maintenance and removal of such Exterior Signage
shall be performed at Tenant’s expense in accordance with the terms and
conditions governing alterations pursuant to Subsection 6.2.5 of the Lease.

Notwithstanding the foregoing, within thirty (30) days after the date on which
(i) there occurs, and remains uncured, a monetary Default of Tenant (beyond
applicable notice and period of cure), (ii) Performance Technologies,
Incorporated, itself, is no longer leasing the entirety of the Building, or
(iii) the Term of the Lease expires or is terminated for all or any portion of
the Building, then Tenant shall, at its cost and expense, remove the Exterior
Signage and restore all damage to the Building caused by the installation and/or
removal of such Exterior Signage, which removal and restoration shall be
performed in accordance with the terms and conditions governing alterations
pursuant to Subsection 6.2.5 of the Lease.  In the event that (x) the original
placement of the Exterior Signage is in front of the Warehouse Premises and (y)
Tenant does not renew the then applicable Warehouse Premises Term, Landlord may
require Tenant, at Tenant’s sole cost and expense, to relocate the Exterior
Signage and repair any damage to the Building caused by the removal thereof.  
The rights to the Exterior Signage granted pursuant to this paragraph are
personal to Performance Technologies, Incorporated, and may not be exercised by
any occupant, subtenant, or other assignee of Performance Technologies,
Incorporated.  Landlord shall cooperate with Tenant’s efforts to obtain any
permit or approval required or desirable in connection with the installation of
the Exterior Signage, and Tenant shall reimburse Landlord for its reasonable
third party out-of-pocket costs incurred in connection with providing such
cooperation. 

 

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[Signatures on following page]

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WITNESS the execution hereof under seal on the day and year first above written.

LANDLORD:

 

HUB PROPERTIES TRUST, a
Maryland real estate investment trust

 

 

By:      /s/ David M. Lepore   

David M. Lepore

Senior Vice President

 

 

TENANT:

 

PERFORMANCE TECHNOLOGIES, INCORPORATED, a Delaware corporation

 

 

By:     /s/ Dorrance W. Lamb       

Name:     Dorrance W. Lamb

Title:   Sr. VP – Finance and CFO

 

 

 

 

 

 

 

 

 

 

 

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