Exhibit 10.2


 


OFFICE LEASE AGREEMENT


 


 


300 Nickerson Road, Marlborough, Massachusetts


 


BETWEEN


 


NORMANDY NICKERSON ROAD, LLC, a
Delaware limited liability company


(“LANDLORD”)


 


and


 


BIO-KEY INTERNATIONAL, INC., a
Delaware corporation


(“TENANT”)


 

















 


OFFICE LEASE AGREEMENT


 


THIS
OFFICE LEASE AGREEMENT (the “Lease”) is made and entered into as of June 30,
2008, by and between NORMANDY NICKERSON ROAD,
LLC, a Delaware limited liability company (“Landlord”) and BIO-KEY INTERNATIONAL, INC., a Delaware corporation (“Tenant”). 
The following exhibits and attachments are incorporated into and made a
part of the Lease: Exhibit A
(Outline and Location of Premises), Exhibit B
(Expenses and Taxes), Exhibit C (Intentionally
Omitted), Exhibit D
(Commencement Letter), Exhibit E
(Building Rules and Regulations), Exhibit F
(Landlord’s Work) and Exhibit G
(Form of Letter of Credit).


 


1.             Basic
Lease Information.


 


1.1           “Building”
shall mean the building located at 300
Nickerson Road, Marlborough, Massachusetts 01752.  “Rentable
Square Footage of the Building” is deemed to be  80,724 square feet.


 


1.2           “Premises”
shall mean the area shown on Exhibit A
to this Lease.  The Premises is located
on the first floor of the Building as shown on Exhibit A.  The “Rentable
Square Footage of the Premises” is deemed to be 14,907 rentable square feet. Landlord and
Tenant stipulate and agree that the Rentable Square Footage of the Building and
the Rentable Square Footage of the Premises are correct.


 


1.3           “Base Rent”:


 


	
  Period or Months of Term

  	
   

  	
  Monthly

  Base Rent

  	
   

  
	
  Lease Months 1 - 12

  	
   

  	
  $

  	
  20,250.00

  	
   

  
	
  Lease Months 13 - 24

  	
   

  	
  $

  	
  26,397.81

  	
   

  
	
  Lease Months 25 - 36

  	
   

  	
  $

  	
  27,640.06

  	
   

  



 


1.4           “Tenant’s
Pro Rata Share”: 18.5% for the Building and 2.3% for the
Complex.  Tenant’s Pro Rata Share shall
be adjusted for changes in the Rentable Square Footage of the Premises and/or
the Rentable Square Footage of the Building and/or Complex, including, without
limitation, changes which may result from any condemnation or other taking of a
portion of the Building and/or Complex.


 


1.5           “Base Year”
for Taxes:  Fiscal Year (defined below)
2009 (i.e., July 1, 2008 to June 30, 2009); “Base Year” for Expenses (defined in Exhibit B):  calendar year 2009.


 


For purposes
hereof, “Fiscal Year” shall mean
the Base Year for Taxes and each period of July 1 to June 30
thereafter.


 


1.6           “Term”:
A period of thirty-six (36) Lease Months. 
The Term shall commence on September 1,
2008 (the “Commencement Date”)
and, unless terminated early in accordance with this Lease, end on the last day
of the thirty-sixth (36th) Lease Month following the Commencement
Date (the “Termination Date”).  As used herein, the term 


 


1

















 


“Lease Month” shall mean a
calendar month (or, if the Commencement Date is not the first day of a calendar
month, the first Lease Month shall be such partial calendar month in which the
Commencement Date occurs plus the first full calendar month thereafter).


 


1.7           “Complex”:
Those certain parcels of land (approximately 85 acres) and the buildings, the
parking areas and other improvements thereon, including the Building,
collectively known as 100-700 Nickerson Road, Marlborough, Middlesex County,
Massachusetts, also commonly known as Marlborough Technology Complex, as well
as any additional buildings or amenities that may be constructed on the Complex
property.


 


1.8           “Security
Deposit”:  $40,500.00, as more fully described in Section 6.


 


1.9           Intentionally Omitted.


 


1.10         “Broker”:
Richards Barry Joyce & Partners.


 


1.11         “Permitted
Use”:  General office use with
ancillary computer server rooms.


 


1.12         “Notice
Address(es)”:


 


Landlord:


 


Steve Smith


Normandy Real
Estate Management


1776 On the
Green


67 Park Place
East


Morristown,
New Jersey 07960


 


With a copy
to:


 


Raymond P.
Trevisan


Principal,
General Counsel


Normandy Real
Estate Partners


67 Park Place
East


Morristown,
New Jersey 07960


 


Tenant:


 


BIO-key International, Inc.


300 Nickerson
Road


Marlborough,
Massachusetts 01752


 


1.13         “Business
Day(s)” are Monday through Friday of each week, exclusive of New
Year’s Day, Presidents Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day 


 


2

















 


and Christmas Day (“Holidays”).  Landlord may designate additional Holidays
that are commonly recognized by other office buildings in the area where the
Building is located.  “Building Service Hours” are 8:00 a.m.
to 6:00 p.m. on Business Days and 9:00 a.m. to 1:00 p.m. on
Saturdays (excluding Holidays).


 


2.             Lease
Grant.


 


The Premises are hereby leased
to Tenant from Landlord, together with the right to use any portions of the
Complex that are from time to time designated by Landlord for the common use of
tenants and others, such as sidewalks, driveways, parking areas, common
corridors, elevator foyers, common restrooms and lobby areas (the “Common Areas”).  Nothing contained herein shall affect
Landlord’s right to add to, subtract from, or alter the Common Areas, including
but not limited to making such changes in or to the Building and/or Complex and
the fixtures and equipment thereof, as well as in or to the street entrances,
halls, passages, elevators, stairways and other improvements thereof, as
Landlord may deem necessary or desirable, so long as the same does not
materially adversely affect Tenant’s access to or use of the Premises.


 


Landlord may adopt any name for
the Building and/or Complex and Landlord reserves the right to change the name
or address of the Building at any time.


 


Tenant shall have access to the
Premises twenty-four (24) hours per day, seven (7) days per week.


 


3.             Possession;
Landlord’s Work.


 


3.1           Tenant
acknowledges that as of the date hereof, Tenant is currently in possession of
the Premises pursuant to a sublease between Aether Systems, Inc., as
sublessor, and Tenant, as sublessee.


 


3.2           Subject to
substantial completion of Landlord’s Work (as defined in Exhibit F), the
Premises are accepted by Tenant in “as is” condition and configuration without
any representations or warranties by Landlord except as expressly provided
herein. By having already taken possession of the Premises as of the date
hereof,  Tenant agrees that the Premises
are in good order and satisfactory condition. 
Tenant acknowledges that Landlord’s Work shall commence upon the
Commencement Date and, subject to the provisions of Exhibit F, Landlord
shall use commercially reasonable efforts to complete the Landlord’s Work as
soon as reasonably possible.  Tenant
shall reasonably cooperate with Landlord in Landlord’s performance of the
Landlord’s Work (including without limitation internally relocating within the
Premises, at Tenant’s sole cost, Tenant’s personnel and/or furniture, fixtures
and equipment so as not to interfere with Landlord’s Work), Tenant hereby
acknowledging that such work shall be performed on Business Days during
Building Service Hours.


 


3

















 


4.             Rent.


 


4.1           Tenant
shall pay Landlord, without any setoff or deduction, unless expressly set forth
in this Lease, all Base Rent and Additional Rent due for the Term (collectively
referred to as “Rent”). “Additional Rent” means all sums (exclusive
of Base Rent) that Tenant is required to pay Landlord under this Lease. Tenant
shall pay and be liable for all rental, sales and use taxes (but excluding
income taxes), if any, imposed upon or measured by Rent.  Base Rent and recurring monthly charges of
Additional Rent shall be due and payable in advance on the first day of each
calendar month without notice or demand, provided that the installment of Base
Rent for the first full calendar month of the Term, and the first monthly
installment of Additional Rent for Expenses and Taxes, shall be payable upon
the execution of this Lease by Tenant. 
Unless otherwise specifically set forth herein, all other items of Rent
shall be due and payable by Tenant on or before thirty (30) days after billing
by Landlord.  Rent shall be made payable
to the entity, and sent to the address, Landlord designates and shall be made
by good and sufficient check or by other means acceptable to Landlord and
initially shall be made as follows:


 


	
  If by Regular Mail:

  	
  Normandy Nickerson Road, LLC

  
	
   

  	
  P.O. Box 30930

  
	
   

  	
  New York, New York 10087-0930

  
	
   

  	
   

  
	
  If by Overnight Mail/Courier:

  	
  JP Morgan Chase - Lockbox Processing

  
	
   

  	
  Normandy Nickerson Road, LLC

  
	
   

  	
  Lockbox 30930

  
	
   

  	
  4 Chase Metrotech Center

  
	
   

  	
  Ground Level Courier on Willoughby Street

  
	
   

  	
  Brooklyn, NY 11245

  
	
   

  	
   

  
	
  If by Wire Transfer:

  	
  Normandy Nickerson Road, LLC

  
	
   

  	
  Account No. 230460283

  
	
   

  	
  ABA : 021000021

  
	
   

  	
  Bank: JPMorgan Chase Bank

  
	
   

  	
  401 Madison Avenue

  
	
   

  	
  New York, NY 10017

  



 


Tenant shall pay Landlord an administration fee equal to 5% of all past
due Rent that is not paid within five (5) days of the date when due.  In addition, past due Rent shall accrue
interest at the lesser of 12% per annum or the maximum rate allowed by law from
the due date until actually paid. 
Landlord’s acceptance of less than the correct amount of Rent shall be
considered a payment on account of the earliest Rent due. Rent for any partial
month during the Term shall be prorated. No endorsement or statement on a check
or letter accompanying payment shall be considered an accord and
satisfaction.  Tenant’s covenant to pay
Rent is independent of every other covenant in this Lease.


 


4.2           Tenant
shall pay Tenant’s Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of this Lease.


 


4

















 


4.3           Tenant
waives all rights (i) to any abatement, suspension, deferment or reduction
of or from Rent, and (ii) to quit, terminate or surrender this Lease or
the Premises or any part thereof, except, in either case, as expressly provided
herein.  Tenant hereby acknowledges and
agrees that the obligations of Tenant hereunder shall be separate and
independent covenants and agreements, that Rent shall continue to be payable in
all events and that the obligations of Tenant hereunder shall continue
unaffected, unless the requirement to pay or perform the same shall have been
terminated pursuant to an express provision of this Lease.  Landlord and Tenant each acknowledges and
agrees that the independent nature of the obligations of Tenant hereunder
represents fair, reasonable and accepted commercial practice with respect to
the type of property subject to this Lease, and that this agreement is the
product of free and informed negotiation during which both Landlord and Tenant
were represented by counsel skilled in negotiating and drafting commercial
leases in Massachusetts, and that the acknowledgements and agreements contained
herein are made with full knowledge of the holding in Wesson v. Leone Enterprises, Inc.,
437 Mass. 708 (2002).  Such
acknowledgements, agreements and waivers by Tenant are a material inducement to
Landlord entering into this Lease.


 


5.             Compliance
with Laws; Use.


 


The Premises shall be used for
the Permitted Use and for no other use whatsoever. Tenant shall comply with all
statutes, codes, ordinances, orders, rules and regulations of any
municipal or governmental entity whether in effect now or later, including the
Americans with Disabilities Act (“Law(s)”),
regarding the operation of Tenant’s business and the use, condition,
configuration and occupancy of the Premises. In addition, Tenant shall, at its
sole cost and expense, promptly comply with any Laws that relate to the base
building to the extent such obligations are triggered by Tenant’s use of the
Premises, other than for the Permitted Use, or Alterations or improvements in
the Premises performed or requested by Tenant. Tenant shall promptly provide
Landlord with copies of any notices it receives regarding an alleged violation
of Law involving the Premises.  Tenant
shall comply with the rules and regulations of the Building attached as Exhibit E and such other reasonable rules and
regulations adopted by Landlord from time to time, including rules and
regulations for the performance of Alterations (defined below).  Landlord agrees that such rules and
regulations shall be established and applied by Landlord in a
non-discriminatory fashion, such that all rules and regulations shall be
generally applicable to all other tenants of the Building of a similar nature
of Tenant.  Landlord makes no warranty or
representation that the Building and/or Premises are suitable for Tenant’s use,
including without limitation the Permitted Use.


 


6.             Security
Deposit.


 


The Security Deposit shall be
delivered to Landlord upon the execution of this Lease by Tenant and held by
Landlord without liability for interest (unless required by Law) as security
for the performance of Tenant’s obligations. 
Unless otherwise required by Law, the Security Deposit may be commingled
with Landlord’s general accounts.  The
Security Deposit is not an advance payment of Rent or a measure of
damages.  Landlord may use all or a
portion of the Security Deposit to satisfy past-due Rent or to cure any Default
(defined below) by Tenant.  If Landlord
uses any portion of the Security Deposit, 


 


5

















 


Tenant shall, within ten (10) days
after demand, restore the Security Deposit to its original amount. Landlord
shall return any unapplied portion of the Security Deposit to Tenant within 45
days after the later to occur of: (a) determination of the final Rent due
from Tenant; or (b) the later to occur of the Termination Date or the date
Tenant surrenders the Premises to Landlord in compliance with Section 25.  Landlord may assign the Security Deposit to a
successor or transferee and, following the assignment, Landlord shall have no
further liability for the return of the Security Deposit. Landlord shall not be
required to keep the Security Deposit separate from its other accounts.


 


The Security Deposit shall be
in the form of an irrevocable letter of credit (the “Letter of Credit”), which Letter of Credit shall:  (a) be in the amount of $40,500.00; (b) be issued on the
form attached hereto as Exhibit G;
(c) name Landlord as its beneficiary; and (d) be drawn on an FDIC
insured financial institution satisfactory to the Landlord.  The Letter of Credit (and any renewals or
replacements thereof) shall be for a term of not less than one (1) year.  Tenant agrees that it shall from time to
time, as necessary, whether as a result of a draw on the Letter of Credit by
Landlord pursuant to the terms hereof or as a result of the expiration of the
Letter of Credit then in effect, renew or replace the original and any
subsequent Letter of Credit so that a Letter of Credit, in the amount required
hereunder, is in effect until a date which is at least sixty (60) days after
the Termination Date of the Lease.  If
Tenant fails to furnish such renewal or replacement at least sixty (60) days
prior to the stated expiration date of the Letter of Credit then held by
Landlord, Landlord may draw upon such Letter of Credit and hold the proceeds
thereof (and such proceeds need not be segregated) as a Security Deposit pursuant
to the terms of this Section 6.  Any
renewal or replacement of the original or any subsequent Letter of Credit shall
meet the requirements for the original Letter of Credit as set forth above,
except that such replacement or renewal shall be issued by a national bank
satisfactory to Landlord at the time of the issuance thereof.


 


If Landlord draws on the Letter
of Credit as permitted in this Lease or the Letter of Credit, then, promptly
upon demand of Landlord, Tenant shall restore the amount available under the
Letter of Credit to its original amount by providing Landlord with an amendment
to the Letter of Credit evidencing that the amount available under the Letter
of Credit has been restored to its original amount.


 


7.             Building
Services.


 


7.1           Landlord shall
furnish Tenant with the following services: (a) water for use in the base
building lavatories; (b) customary heat and air conditioning in season
during the Building Service Hours; provided that Tenant may receive HVAC
service during hours other than the Building Service Hours by paying Landlord’s
then standard charge for additional HVAC service so long as Tenant requests
same by written notice to Landlord not later than 12:00 noon on the Business
Day preceding the day of such overtime usage; (c) standard janitorial
service on Business Days; (d) Electricity in accordance with the terms and
conditions in Section 7.2; (d) maintenance services as described in Section 9.2
below; and (f) such other services as Landlord reasonably determines are
necessary or appropriate for the Building or Complex.


 


6
















 


7.2                                 Electricity
shall be distributed to the Premises either by the electric utility company
selected by Landlord to provide electricity service for the Building and/or the
Complex, or, at Landlord’s option, by Landlord; and Landlord shall permit
Landlord’s wires and conduits, to the extent available, suitable and safely
capable, to be used for such distribution. If and so long as Landlord is
distributing electricity to the Premises, Tenant shall obtain all of its
electricity from Landlord and shall pay all of Landlord’s charges, which
charges shall be based, at Landlord’s option, either on meter readings or on
Landlord’s reasonable estimate of Tenant’s electrical usage or on Tenant’s pro
rata share of all space, including the Premises, which is commonly metered with
the Premises.  In calculating such
charges, there shall be included all costs to Landlord to obtain electric
service to the Building and/or the Complex, including all costs of whatever
nature incurred in connection with entering agreements for obtaining such
service from utility suppliers. 
Initially, such charges will be based on Landlord’s estimated cost of $1.75 per annum per rentable square
foot of floor area in the Premises ($2,173.94 per month).  If the electric utility company selected by Landlord
to provide electricity service for the Building and/or the Complex is
distributing electricity to the Premises, Landlord may elect to require Tenant,
at its cost, to make all necessary arrangements with such electric utility
company for metering and paying for electric current furnished to the Premises.
All electricity used during the performance of janitorial service, or the
making of any alterations or repairs in or to the Premises, or the operation of
any special air conditioning system serving the Premises, shall be paid by
Tenant.


 


Landlord reserves the right at
any time and from time to time before or during the Term to with an electric
service provider (“Electric Service Provider”)
of its choice to provide electricity service for the Building.  Tenant shall cooperate with Landlord and the
Electric Service Provider at all times and, as reasonably necessary, shall
allow Landlord and the Electric Service Provider reasonable access to the
Building’s and Complex’s electric lines, feeders, risers, wiring and other
machinery within the Premises.


 


Without the consent of Landlord, Tenant’s use of electrical service
shall not exceed, either in voltage, rated capacity, use beyond the Building
Service Hours or overall load, that which Landlord reasonably deems to be
standard for the Building. Landlord shall have the right to measure electrical
usage by commonly accepted methods. If it is determined that Tenant is using
excess electricity, Tenant shall pay Landlord for the cost of such excess
electrical usage as Additional Rent. All electricity used during the
performance of janitorial service, or the making of any alterations or repairs
in or to the Premises, or the operation of any special air conditioning system
serving the Premises, shall be paid by Tenant.


 


7.3                                 Landlord’s
failure to furnish, or any interruption, diminishment or termination of
services due to the application of Laws, the failure of any equipment, the
performance of repairs, improvements or alterations, utility interruptions or
the occurrence of an event of Force Majeure (defined below) (collectively a “Service Failure”) shall not render Landlord
liable to Tenant, constitute a constructive eviction of Tenant, give rise to an
abatement of Rent, nor relieve Tenant from the obligation to fulfill any
covenant or agreement.  Notwithstanding
the foregoing, in the event a Service Failure that is within the reasonable 


 


7

















 


control of Landlord continues for a period in
excess of five (5) consecutive business days, Tenant’s Base Rent shall
abate on a day-by-day basis in proportion to the portion of the Premises that
Tenant is unable to use for the Permitted Use. 
The foregoing rent abatement shall be the Tenant’s sole remedy for any
interruption of Tenant’s business operations due to such Service Failure.


 


8.                                     Leasehold
Improvements.


 


All improvements in and to the
Premises, including any Alterations (collectively, “Leasehold Improvements”) shall remain upon the Premises at the
end of the Term without compensation to Tenant. 
Landlord, however, by written notice to Tenant at least forty-five (45)
days prior to the Termination Date, may require Tenant, at its expense, to
remove (a) any Cable (defined below) installed by or for the benefit of
Tenant, and (b) any Alterations (defined below) that, in Landlord’s
reasonable judgment, are of a nature that would require removal and repair
costs that are materially in excess of the removal and repair costs associated
with standard office improvements (collectively referred to as “Required Removables”).  Required Removables shall include, without
limitation, internal stairways, raised floors, personal restrooms and showers,
vaults, rolling file systems and structural alterations and modifications. The
designated Required Removables shall be removed by Tenant before the
Termination Date. Tenant shall repair damage caused by the installation or
removal of Required Removables.  If
Tenant fails to perform its obligations in a timely manner, Landlord may
perform such work at Tenant’s expense. Tenant, at the time it requests approval
for a proposed Alteration, may request in writing that Landlord advise Tenant
whether the Alteration or any portion of the Alteration is a Required
Removable.  In addition, Tenant shall be
entitled to remove all articles of personal property and all machinery,
equipment and furniture owned and installed by Tenant; provided that Tenant
shall repair damage caused by the removal of such items.


 


9.                                     Repairs and
Alterations.


 


9.1                                 Tenant
shall periodically inspect the Premises to identify any conditions that are
dangerous or in need of maintenance or repair. 
Tenant shall promptly provide Landlord with notice of any such
conditions. Tenant shall, at its sole cost and expense, perform all maintenance
and repairs to the Premises that are not Landlord’s express responsibility
under this Lease, and keep the Premises in good condition and repair,
reasonable wear and tear and damage by fire or other casualty and as a
consequence of the exercise of the power of eminent domain excepted. Tenant’s
repair and maintenance obligations include, without limitation, repairs to: (a) floor
covering; (b) interior partitions; (c) doors; (d) the interior
side of demising walls; (e) electronic, phone and data cabling and related
equipment that is installed by or for the exclusive benefit of Tenant
(collectively, “Cable”); (f) supplemental
air conditioning units, kitchens, hot water heaters, plumbing, and similar
facilities exclusively serving Tenant; and (g) Alterations. To the extent
Landlord is not reimbursed by insurance proceeds, Tenant shall reimburse
Landlord for the cost of repairing damage to the Building caused by the acts of
Tenant, Tenant Related Parties and their respective contractors and vendors. If
Tenant fails to make any repairs to the Premises for more than fifteen (15)
days after notice from Landlord (although notice 


 


8

















 


shall not be required in an emergency),
Landlord may make the repairs, and Tenant shall pay the reasonable cost of the
repairs, together with an administrative charge in an amount equal to 5% of the
cost of such repairs.  “Tenant Related Parties” shall mean Tenant’s
officers, directors, shareholders, employees and agents.


 


9.2                                 Landlord
shall keep and maintain in good repair and working order, in a manner generally
commensurate with first class office buildings located in the suburban
metropolitan Boston area and perform maintenance upon (a) structural
elements of the Building; (b) mechanical (including HVAC), electrical,
plumbing and fire/life safety systems serving the Building in general; (c) Common
Areas; (d) roof of the Building; (e) exterior windows of the
Building; and (f) elevators serving the Building. Landlord shall promptly
make repairs for which Landlord is responsible.


 


9.3                                 Tenant
shall not make alterations, repairs, additions or improvements or install any
Cable (collectively referred to as “Alterations”)
without first obtaining the written consent of Landlord in each instance.
However, Landlord’s consent shall not be required for any Alteration that
satisfies all of the following criteria (a “Cosmetic
Alteration”):  (a) is of
a cosmetic nature such as painting, wallpapering, hanging pictures and
installing carpeting; (b) is not visible from the exterior of the Premises
or Building; (c) will not affect the Base Building; and (d) does not
require work to be performed inside the walls, below the floor, or above the
ceiling of the Premises and (e) the cost of such work does not exceed
$25,000.  Cosmetic Alterations shall be
subject to all the other provisions of this Section 9.3.  Prior to starting any Alteration work, Tenant
shall furnish Landlord with plans and specifications; names of contractors
reasonably acceptable to Landlord (provided that Landlord may designate
specific contractors with respect to base building work); required permits and
approvals; evidence of contractor’s and subcontractor’s insurance in amounts
reasonably required by Landlord and naming Landlord as an additional insured;
and any security for performance in amounts reasonably required by
Landlord.  Changes to the plans and
specifications must also be submitted to Landlord for its approval. Alterations
shall be constructed in a good and workmanlike manner using new materials of a
quality reasonably approved by Landlord but in all instances at least equal to
the then current quality of materials in the Premises. Tenant shall reimburse
Landlord for any sums paid by Landlord for third party examination of Tenant’s
plans for non-Cosmetic Alterations.  In
addition, Tenant shall pay Landlord, as Additional Rent, a fee for Landlord’s
oversight and coordination of any Alterations other than Cosmetic Alterations
equal to 5% of the cost of the Alterations (excluding the Landlord Work set
forth in Exhibit F except for any Additional Construction Cost as defined
in Exhibit F).  Upon completion,
Tenant shall furnish “as-built” plans for all Alterations other than Cosmetic
Alterations, completion affidavits and full and final lien waivers. Landlord’s
approval of an Alteration shall not be deemed a representation by Landlord that
the Alteration complies with Law.  If at
any time construction by or on behalf of Tenant shall cause disharmony,
interference or union disputes of any nature whatsoever, whether with
contractors of the Landlord and/or other tenants or occupants of the Building,
Landlord reserves the right, without any liability to Landlord whatsoever, to
immediately halt such construction and/or bar any offending contractors and/or subcontractors
from the Building until such disharmony, interference or union disputes may be
resolved.  Notwithstanding anything to
the contrary contained 


 


9

















 


herein, Tenant shall be entitled to replace
rugs, and repaint and patch walls, in the Premises without Landlord’s consent
or the prior submission of plans and specifications.


 


10.                               Entry
by Landlord.


 


Landlord may enter the Premises
to inspect, show or clean the Premises or to perform or facilitate the performance
of repairs, alterations or additions to the Premises or any portion of the
Building (including for the purpose of checking, calibrating, adjusting and
balancing controls and other parts of the Building’s systems).  Except in emergencies or to provide Building
services, Landlord shall provide Tenant with reasonable prior verbal notice of
entry and shall use reasonable efforts to minimize any interference with Tenant’s
use of the Premises.  If reasonably
necessary, Landlord may temporarily close all or a portion of the Premises to
perform repairs, alterations and additions. 
However, except in emergencies, Landlord will not close the Premises if
the work can reasonably be completed on weekends and after Building Service
Hours.  Entry by Landlord shall not
constitute a constructive eviction or entitle Tenant to an abatement or
reduction of Rent.


 


11.                               Assignment and
Subletting.


 


11.1                           Except
in connection with a Permitted Transfer (defined below), Tenant shall not
assign, sublease, transfer or encumber any interest in this Lease or allow any
third party to use any portion of the Premises (collectively or individually, a
“Transfer”) without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed if Landlord does not exercise its recapture rights under
Section 11.2.  If the entity which
controls the voting shares/rights of Tenant changes at any time, such change of
ownership or control shall constitute a Transfer unless Tenant is an entity
whose outstanding stock is listed on a recognized securities exchange or if at
least 80% of its voting stock is owned by another entity, the voting stock of
which is so listed.  Any attempted
Transfer in violation of this Section is voidable by Landlord. In no event
shall any Transfer, including a Permitted Transfer, release or relieve Tenant
from any obligation under this Lease.  
Notwithstanding the foregoing, in the event a Default exists either at
the time Tenant requests consent for such sublease or assignment or at the
commencement of such sublease or assignment (including without limitation a
Permitted Transfer), Landlord may, at its sole discretion, refuse consent to
such assignment or sublease and/or declare such assignment or sublease void and
without force or effect.  Tenant shall
not be entitled to receive monetary damages based upon a claim that Landlord
unreasonably withheld its consent to a proposed transfer and Tenant’s sole
remedy shall be an action to enforce any such provision through specific
performance or declaratory judgment.


 


11.2                           Tenant
shall provide Landlord with financial statements for the proposed transferee, a
fully executed copy of the proposed assignment, sublease or other Transfer
documentation and such other information as Landlord may reasonably request.
Within fifteen (15) Business Days after receipt of the required information and
documentation, Landlord shall either: (a) consent to the Transfer by
execution of a consent agreement in a form reasonably designated by Landlord; (b) reasonably
refuse to consent to the 


 


10

















 


Transfer in writing; or (c) recapture
the portion of the Premises that Tenant is proposing to Transfer; provided,
however, Tenant may rescind its proposal to assign, sublease or otherwise
Transfer and thereby nullify Landlord’s recapture of the portion of the
Premises being transferred by giving written notice to Landlord within three (3) business
days after receiving Landlord’s notice of recapture.  If Landlord exercises its right to recapture,
this Lease shall automatically be amended (or terminated if the entire Premises
is being assigned or sublet) to delete the applicable portion of the Premises
effective on the proposed effective date of the Transfer.  Tenant shall pay to Landlord, as Additional
Rent, a review fee of $1,500.00 for Landlord’s review of any Permitted Transfer
or requested Transfer.


 


11.3                           Tenant
shall pay Landlord, as Additional Rent, 50% of all rent and other consideration
which Tenant receives as a result of a Transfer that is in excess of the Rent
payable to Landlord for the portion of the Premises and Term covered by the
Transfer.  Tenant shall pay Landlord for
Landlord’s share of the excess within thirty (30) days after Tenant’s receipt
of the excess.  Tenant may deduct from
the excess, on a straight-line basis, all reasonable and customary expenses
directly incurred by Tenant attributable to the Transfer including leasing
commissions (but excluding tenant improvement allowances or other incentives).  If Tenant is in Default, Landlord may require
that all sublease payments be made directly to Landlord, in which case Tenant
shall receive a credit against Rent in the amount of Tenant’s share of payments
received by Landlord.


 


11.4                           Tenant
may assign this Lease to a successor to Tenant by purchase, merger,
consolidation or reorganization (an “Ownership
Change”) or assign this Lease or sublet all or a portion of the
Premises to an Affiliate without the consent of Landlord, provided that all of
the following conditions are satisfied (a “Permitted
Transfer”):  (a) Tenant
is not in Default; (b) in the event of an Ownership Change, Tenant’s
successor shall own substantially all of the assets of Tenant and have a net
worth which is at least equal to Tenant’s net worth as of the day prior to the
proposed Ownership Change; (c) the use is only for the Permitted Use; and (d) Tenant
shall give Landlord written notice at least ten (10) days prior to the
effective date of the Permitted Transfer. Tenant’s notice to Landlord shall
include information and documentation evidencing the Permitted Transfer and
showing that each of the above conditions has been satisfied.  If requested by Landlord, Tenant’s successor
shall sign a commercially reasonable form of assumption agreement. “Affiliate” shall mean an entity controlled
by, controlling or under common control with Tenant (for such period of time as
such entity continues to be controlled by, controlling or under common control
with Tenant, it being agreed that the subsequent sale or transfer of stock
resulting in a change in voting control, or any other transaction(s) having
the overall effect that such entity ceases to be controlled by, controlling or
under common control with Tenant, shall be treated as if such sale or transfer or
transaction(s) were, for all purposes, an assignment of this Lease
governed by the provisions of this Section).


 


12.                              Liens.


 


Tenant shall not permit
mechanics’ or other liens to be placed upon the Complex, Premises or Tenant’s
leasehold interest in connection with any work or service done or 


 


11

















 


purportedly done by or for the
benefit of Tenant or its transferees. 
Tenant shall give Landlord notice at least fifteen (15) days prior to
the commencement of any work in the Premises to afford Landlord the
opportunity, where applicable, to post and record notices of
non-responsibility. Tenant shall immediately fully discharge any lien or like
filing, including any notice of contract, by settlement, by bonding or by
insuring over the lien in the manner prescribed by the applicable lien
Law.  If Tenant fails to do so, such
failure shall be a default hereunder and Landlord may bond, insure over or
otherwise discharge the lien.  Tenant
shall reimburse Landlord for any amount paid by Landlord, including, without
limitation, reasonable attorneys’ fees. 
Landlord shall have the right to require Tenant to post a performance or
payment bond in connection with any work or service done or purportedly done by
or for the benefit of Tenant.  Tenant
acknowledges and agrees that all such work or service is being performed for
the sole benefit of Tenant and not for the benefit of Landlord.


 


13.                              Indemnity and Waiver of
Claims.


 


Except to the extent caused by
the gross negligence or willful misconduct of Landlord or any Landlord Related
Parties, Tenant hereby waives all claims against and releases Landlord and its
trustees, members, principals, beneficiaries, partners, officers, directors,
employees, Mortgagees (defined below) and agents (the “Landlord Related Parties”) from all claims
for any injury to or death of persons, damage to property or business loss in
any manner related to (a) Force Majeure, (b) acts of third parties, (c) the
bursting or leaking of any tank, water closet, drain or other pipe, (d) the
inadequacy or failure of any security services, personnel or equipment,  or (e) any matter not within the
reasonable control of Landlord.  In
addition to the foregoing Tenant agrees that Landlord shall have no
responsibility or liability whatsoever for any loss or damage, however caused,
to furnishings, fixtures, equipment, or other personal property of Tenant or of
any persons claiming by, through, or under Tenant. Except to the extent caused
by the negligence or willful misconduct of Landlord or any Landlord Related
Parties, Tenant shall indemnify, defend and hold Landlord and Landlord Related
Parties harmless against and from all liabilities, obligations, damages,
penalties, claims, actions, costs, charges and expenses, including, without
limitation, reasonable attorneys’ fees and other professional fees (if and to
the extent permitted by Law) (collectively referred to as “Losses”), which may be imposed upon,
incurred by or asserted against Landlord or any of the Landlord Related Parties
by any third party and arising out of or in connection with any damage or
injury occurring in the Premises or any acts or omissions (including violations
of Law) of Tenant, the Tenant Related Parties or any of Tenant’s transferees,
contractors or licensees.


 


14.                              Insurance.


 


14.1                           Tenant
shall maintain the following insurance (“Tenant’s
Insurance”):  (a) Commercial
General Liability Insurance applicable to the Premises and its appurtenances
providing, on an occurrence basis, a minimum combined single limit of
$3,000,000.00; (b)  Property/Business Interruption Insurance written on an
All Risk or Special Perils form, with coverage for broad form water damage, at
replacement cost value and with a replacement cost endorsement covering all of
Tenant’s business and trade fixtures, 


 


12

















 


equipment, movable partitions, furniture,
merchandise and other personal property within the Premises (“Tenant’s Property”) and any Leasehold
Improvements performed by or for the benefit of Tenant; (c) Workers’
Compensation Insurance in amounts required by Law; and (d) Employers
Liability Coverage of at least $1,000,000.00 per occurrence.  Any company writing Tenant’s Insurance shall
have an A.M. Best rating of not less than A-VIII.  All Commercial General Liability Insurance
policies shall name as additional insureds Landlord (or its successors and
assignees), the holder(s) of any mortgage(s) encumbering the
Premises, the managing agent for the Building (or any successor),  and their respective members, principals,
beneficiaries, partners, officers, directors, employees, and agents, and other
designees of Landlord and its successors as the interest of such designees
shall appear. All policies of Tenant’s Insurance shall contain endorsements
that the insurer(s) shall give Landlord and its designees at least thirty
(30) days’ advance written notice of any cancellation, termination, material
change or lapse of insurance. Tenant shall provide Landlord with a certificate
of insurance evidencing Tenant’s Insurance prior to the Commencement Date, and
thereafter as necessary to assure that Landlord always has current certificates
evidencing Tenant’s Insurance. Tenant’s insurance requirements stipulated
herein are based upon current industry standards, and Landlord reserves the
right to require additional coverage and/or to increase limits as industry
standards change and/or as required by Landlord’s mortgagees from time to
time.  So long as the same is available
at commercially reasonable rates, Landlord shall maintain so called All Risk
property insurance on the Building at replacement cost value as reasonably
estimated by Landlord.


 


14.2                           Tenant
shall not store any article or do anything in or about the Premises which may
be prohibited by Landlord’s insurance policies or any endorsements or forms
attached thereto, or which will increase any insurance rates and premiums on
the Premises or the Building.  Tenant
shall pay within ten (10) days of written demand any increase in premiums
for Landlord’s insurance that may be charged on such insurance carried by
Landlord resulting from Tenant’s use and occupancy of the Premises or the
Building, whether or not Landlord has consented to the same.  In determining whether increased premiums are
the result of Tenant’s use, occupancy or vacancy of the Premises, a schedule
issued by the organization making the fire insurance, extended coverage,
vandalism and malicious mischief, special extended coverage or any all-risk
insurance rates for said Premises or any rule books issued by the rating
organization or similar bodies or by rating procedures or rules of
Landlord’s insurance companies shall be conclusive evidence of the several
items and charges which make up the insurance rates on the Premises and the
Building.


 


15.                              Subrogation.


 


Landlord and Tenant hereby
waive and shall cause their respective insurance carriers to waive any and all
rights of recovery, claims, actions or causes of action against the other for
any loss or damage with respect to Tenant’s Property, Leasehold Improvements,
the Building, the Premises, or any contents thereof, including rights, claims,
actions and causes of action based on negligence, which loss or damage is (or
would have been, had the insurance required by this Lease been carried) covered
by insurance.


 


13
















 


16.                               Casualty
Damage.


 


16.1                           If
all or any portion of the Premises becomes untenantable by fire or other
casualty to the Premises (collectively a “Casualty”),
Landlord, with reasonable promptness, shall cause a general contractor selected
by Landlord to provide Landlord and Tenant with a written estimate of the
amount of time required using standard working methods to Substantially
Complete the repair and restoration of the Premises and any Common Areas
necessary to provide access to the Premises (“Completion
Estimate”).  If the Completion
Estimate indicates that the Premises or any Common Areas necessary to provide
access to the Premises cannot be made tenantable within 270 days from the date
the repair is started, then either party shall have the right to terminate this
Lease upon written notice to the other within ten (10) days after receipt
of the Completion Estimate.  Tenant,
however, shall not have the right to terminate this Lease if the Casualty was
caused by the negligence or intentional misconduct of Tenant or any Tenant
Related Parties. In addition, Landlord, by notice to Tenant within ninety (90)
days after the date of the Casualty, shall have the right to terminate this
Lease if:  (1) the Premises have
been materially damaged and there is less than two (2) years of the Term
remaining on the date of the Casualty; (2) any Mortgagee requires that the
insurance proceeds be applied to the payment of the mortgage debt; or (3) a
material uninsured loss to the Building occurs.


 


16.2                           If
this Lease is not terminated, Landlord shall promptly and diligently, subject
to reasonable delays for insurance adjustment or other matters beyond Landlord’s
reasonable control, restore the Premises and Common Areas. Such restoration
shall be to substantially the same condition that existed prior to the Casualty
to the extent of insurance proceeds received by Landlord, except for
modifications required by Law or any other modifications to the Common Areas
deemed desirable by Landlord. Upon notice from Landlord, Tenant shall assign to
Landlord (or to any party designated by Landlord) all property insurance
proceeds payable to Tenant under Tenant’s Insurance with respect to any
Leasehold Improvements performed by or for the benefit of Tenant; provided if
the estimated cost to repair such Leasehold Improvements exceeds the amount of
insurance proceeds received by Landlord from Tenant’s insurance carrier, the
excess cost of such repairs shall be paid by Tenant to Landlord prior to
Landlord’s commencement of repairs. 
Within fifteen (15) days of demand, Tenant shall also pay Landlord for
any additional excess costs that are determined during the performance of the
repairs. Landlord shall not be liable for any inconvenience to Tenant, or
injury to Tenant’s business resulting in any way from the Casualty or the
repair thereof.  Provided that Tenant is
not in Default, during any period of time that all or a material portion of the
Premises is rendered untenantable as a result of a Casualty, the Rent shall
abate for the portion of the Premises that is untenantable and not used by
Tenant.  If for any reason the work to
repair or rebuild the Premises following a Casualty is not substantially
completed within 270 days after the casualty, Tenant shall have the right to
terminate this Lease by giving Landlord thirty (30) days prior written notice
of Tenant’s election so to do after the expiration of such 270-day period,
whereupon this Lease shall terminate on the date of such notice with the same
force and effect as if such date were the date originally established as the
expiration date hereof; provided that if Landlord substantially 


 


14

















 


completes such work prior to
the end of such 30-day period, such election to terminate shall be void and of
no force or effect.


 


17.                               Condemnation.


 


Either party may terminate this
Lease if any material part of the Premises is taken or condemned for any public
or quasi-public use under Law, by eminent domain or private purchase in lieu
thereof (a “Taking”).  For the purposes of this Section, a “material”
part of the Premises shall be over 30% of the Premises.  Landlord shall also have the right to
terminate this Lease if there is a Taking of any portion of the Building or the
Complex which would have a material adverse effect on Landlord’s ability to
profitably operate the remainder of the Building.  The terminating party shall provide written
notice of termination to the other party within forty-five (45) days after it
first receives notice of the Taking.  The
termination shall be effective on the date the physical taking occurs.  If this Lease is not terminated, Base Rent
and Tenant’s Pro Rata Share shall be appropriately adjusted to account for any
reduction in the square footage of the Building or Premises. All compensation
awarded for a Taking shall be the property of Landlord.  The right to receive compensation or proceeds
are expressly waived by Tenant, however, Tenant may file a separate claim for
Tenant’s Property and Tenant’s reasonable relocation expenses, provided the
filing of the claim does not diminish the amount of Landlord’s award.  If only a part of the Premises is subject to
a Taking and this Lease is not terminated, Landlord, with reasonable diligence,
will restore the remaining portion of the Premises as nearly as practicable to
the condition immediately prior to the Taking.


 


18.                               Events
of Default.


 


Each of the following
occurrences shall be a “Default”: (a) Tenant’s
failure to pay any portion of Rent when due, if the failure continues for five (5) days
after written notice to Tenant (a “Monetary
Default”); (b) Tenant’s failure (other than a Monetary Default)
to comply with any term, provision, condition or covenant of this Lease, if the
failure is not cured within thirty (30) days after written notice to Tenant,
provided, however, if Tenant’s failure to comply cannot reasonably be cured
within 30 days, Tenant shall be allowed additional time (not to exceed 60 days)
as is reasonably necessary to cure the failure so long as Tenant begins the
cure within 10 days after such notice to Tenant and diligently pursues the cure
to completion; (c) Tenant or any guarantor of the Lease becomes insolvent,
makes a transfer in fraud of creditors, makes an assignment for the benefit of
creditors, admits in writing its inability to pay its debts when due or
forfeits or loses its right to conduct business; (d) the leasehold estate
is taken by process or operation of Law; (e) in the case of any ground
floor Tenant, Tenant abandons the Premises (it being understood for purposes of
this Lease that even if Tenant vacates the Premises no abandonment will be
created provided that the Tenant complies with its other obligations under this
Lease); (f) Tenant is in default beyond any notice and cure period under
any other lease or agreement with Landlord at the Building or Complex; or (g) Tenant
is in default under Sections 11.1 or 12 above. If Landlord provides Tenant with
notice of Tenant’s failure to comply with any specific provision of this Lease
on three (3) separate occasions during any 12-month period, Tenant’s
subsequent violation of such provision shall, at Landlord’s option, be an
incurable Default by Tenant. All 


 


15

















 


notices sent under this Section shall
be in satisfaction of, and not in addition to, notice required by Law.


 


19.                               Remedies.


 


19.1                           Upon
Default, Landlord shall have the right to pursue any one or more of the
following remedies:


 


(a)                                  Terminate this Lease,
in which case Tenant shall immediately surrender the Premises to Landlord.  If Tenant fails to surrender the Premises,
Landlord, in compliance with Law, may enter upon and take possession of the
Premises and remove Tenant, Tenant’s Property and any party occupying the
Premises. Tenant shall pay Landlord, on demand, all past due Rent and other
losses and damages Landlord suffers as a result of Tenant’s Default, including,
without limitation, all Costs of Reletting (defined below) and any deficiency
that may arise from reletting or the failure to relet the Premises.  “Costs of
Reletting” shall include all reasonable costs and expenses incurred
by Landlord in reletting or attempting to relet the Premises, including,
without limitation, legal fees, brokerage commissions, the cost of alterations
and the value of other concessions or allowances granted to a new tenant.


 


(b)                                 Terminate Tenant’s
right to possession of the Premises and, in compliance with Law, remove Tenant,
Tenant’s Property and any parties occupying the Premises.  Landlord may (but, except as expressly provided
below, shall not be obligated to) relet all or any part of the Premises,
without notice to Tenant, for such period of time and on such terms and
conditions (which may include concessions, free rent and work allowances) as
Landlord in its absolute discretion shall determine.  Landlord may collect and receive all rents
and other income from the reletting. 
Tenant shall pay Landlord on demand all past due Rent, all Costs of Reletting
and any deficiency arising from the reletting or failure to relet the Premises.
The re-entry or taking of possession of the Premises shall not be construed as
an election by Landlord to terminate this Lease.  Landlord shall use reasonable efforts to
relet the Premises on such terms as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, and alterations
to, and improvement of, the Premises); however, Landlord shall not be obligated
to relet the Premises before leasing other portions of the Building.  Landlord shall not be liable for, nor shall
Tenant’s obligations hereunder be diminished because of, Landlord’s failure to
relet the Premises or to collect rent due for such reletting.


 


19.2                           In
lieu of calculating damages under Section 19.1, Landlord may elect to
receive as damages the sum of (a) all Rent accrued through the date of
termination of this Lease or Tenant’s right to possession, and (b) an
amount equal to the total Rent that Tenant would have been required to pay for
the remainder of the Term discounted to present value, minus the then present
fair rental value of the Premises for the remainder of the Term, similarly
discounted, after deducting all anticipated Costs of Reletting. If Tenant is in
Default of any of its non-monetary obligations under the Lease, Landlord shall
have the right to perform such obligations. 
Tenant shall reimburse Landlord for the cost of such performance upon
demand together with an administrative charge equal to 10% of the cost of the
work performed by Landlord. The repossession or re-entering of all or any 


 


16

















 


part of the Premises shall not relieve Tenant
of its liabilities and obligations under this Lease.  No right or remedy of Landlord shall be
exclusive of any other right or remedy. Each right and remedy shall be
cumulative and in addition to any other right and remedy now or subsequently
available to Landlord at Law or in equity.


 


20.                               Limitation
of Liability.


 


NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY
SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE INTEREST OF LANDLORD IN THE
PROPERTY.  TENANT SHALL LOOK SOLELY TO
LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD
AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER LANDLORD NOR ANY
LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR
DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED PARTY BE
LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. 
BEFORE FILING SUIT FOR AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE
LANDLORD AND THE MORTGAGEE(S) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES
(DEFINED IN SECTION 23 BELOW), NOTICE AND REASONABLE TIME TO CURE THE
ALLEGED DEFAULT. WITHOUT LIMITING THE FOREGOING, IN NO EVENT SHALL LANDLORD OR
ANY MORTGAGEES OR LANDLORD RELATED PARTIES EVER BE LIABLE FOR ANY CONSEQUENTIAL
OR INCIDENTAL DAMAGES OR ANY LOST PROFITS OF TENANT.


 


LANDLORD AND TENANT EXPRESSLY
DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT’S
INTENDED COMMERCIAL PURPOSE, AND TENANT’S OBLIGATION TO PAY RENT HEREUNDER IS
NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD
OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, SETOFF OR
DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS
HEREUNDER, WHETHER EXPRESS OR IMPLIED.


 


21.                               Relocation.


 


Landlord shall have a one-time
right to relocate Tenant from the Premises to space of reasonably comparable
size and utility within the Complex and with substantially equivalent (but not
lesser) quality of finishes to that of the Premises (“Relocation Space”) upon ninety (90) days’
prior written notice to Tenant.  From and
after the date of the relocation, the Base Rent and Tenant’s Pro Rata Share
shall be adjusted downward, if applicable, but in no event upward, based on the
rentable square footage of the Relocation Space.  Landlord shall, at Landlord’s sole cost and
expense, cause Tenant’s relocation to the Relocation Space (including the
moving to, setting up, connecting and 


 


17

















 


testing as to operation in the
Relocation Space, at Tenant’s reasonable direction, of all of Tenant’s
furniture, fixtures and equipment, including but not limited to, Tenant’s
personal property and cabling, which cabling shall be substantially similar to
that of the original Premises) to commence and be completed over a one-weekend
period (or such longer period as is reasonably required to complete the same
subject to Tenant’s reasonable cooperation, at no cost to Tenant, with Landlord
to effect such relocation; i.e. Tenant’s cooperation will be required to
relocate items such as Tenant’s server room). 
Landlord shall reimburse Tenant for Tenant’s actual, out-of-pocket costs
of Tenant’s replacing of its stationery, business cards and similar items as is
reasonably necessary to reflect Tenant’s relocation in the Relocation Space.
Landlord shall coordinate with Tenant the dates and times for Tenant’s
relocation to the Relocation Space so as to minimize any downtime of Tenant
caused by such relocation provided that the relocation occurs within the
aforesaid 90-day period.  Notwithstanding
anything contained herein to the contrary, Landlord shall not have the right to
relocate Tenant during the last six (6) months of the Term.


 


22.                               Holding
Over.


 


If Tenant fails to surrender
all or any part of the Premises at the termination of this Lease, occupancy of
the Premises after termination shall be that of a tenancy at sufferance.  Tenant’s occupancy shall be subject to all
the terms and provisions of this Lease, and Tenant shall pay an amount (on a
per month basis without reduction for partial months during the holdover) equal
to 150% of the sum of the Base Rent and Additional Rent due for the period
immediately preceding the holdover for the first thirty (30) days of the
holdover and thereafter 200% of the sum of the Base Rent and Additional Rent
due for the period immediately preceding the holdover.  No holdover by Tenant or payment by Tenant
after the termination of this Lease shall be construed to extend the Term or
prevent Landlord from immediate recovery of possession of the Premises by
summary proceedings or otherwise. If Landlord is unable to deliver possession
of the Premises to a new tenant or to perform improvements for a new tenant as
a result of Tenant’s holdover and Tenant fails to vacate the Premises within
thirty (30) days after notice from Landlord, Tenant shall be liable for all
damages that Landlord suffers from the holdover.


 


23.                               Subordination
to Mortgages; Estoppel Certificate.


 


Tenant accepts this Lease
subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or
other lien(s) now or subsequently arising upon the Premises, the Building
or the Complex, and to renewals, modifications, refinancings and extensions
thereof (collectively referred to as a “Mortgage”).
The party having the benefit of a Mortgage shall be referred to as a “Mortgagee”. This clause shall be
self-operative, but upon request from a Mortgagee, Tenant shall execute a
commercially reasonable subordination agreement in favor of the Mortgagee. As
an alternative, a Mortgagee shall have the right at any time to subordinate its
Mortgage to this Lease.  Upon request,
Tenant, without charge, shall attorn to any successor to Landlord’s interest in
this Lease.  Landlord and Tenant shall
each, within ten (10) days after receipt of a written request from the
other, execute and deliver a commercially reasonable estoppel certificate to
those parties as are reasonably requested by the other (including a Mortgagee
or 


 


18

















 


prospective purchaser). Without
limitation, such estoppel certificate may include a certification as to the
status of this Lease, the existence of any defaults and the amount of Rent that
is due and payable.  Upon Tenant’s prior
written request, Landlord shall request from Landlord’s current Mortgagee such
Mortgagee’s standard form of subordination and non-disturbance agreement,
provided that Landlord shall under no circumstances be liable for the failure
or refusal of such Mortgagee to provide the same.


 


24.                               Notice.


 


All demands, approvals,
consents or notices (collectively referred to as a “notice”) shall be in
writing and delivered by hand or sent by registered or certified mail with
return receipt requested or sent by overnight or same day courier service at
the party’s respective Notice Address(es) set forth in Section 1.  Each notice shall be deemed to have been
received on the earlier to occur of actual delivery or the date on which
delivery is refused, or, if Tenant has vacated the Premises or any other Notice
Address of Tenant without providing a new Notice Address, three (3) days
after notice is deposited in the U.S. mail or with a courier service in the
manner described above.  Either party
may, at any time, change its Notice Address (other than to a post office box
address) by giving the other party written notice of the new address.


 


25.                               Surrender
of Premises.


 


At the termination of this
Lease or Tenant’s right of possession, Tenant shall remove Tenant’s Property
from the Premises, and quit and surrender the Premises to Landlord, broom
clean, and in good order, condition and repair, ordinary wear and tear and
damage which Landlord is obligated to repair hereunder excepted. If Tenant
fails to remove any of Tenant’s Property within seven (7) days after
termination of this Lease or Tenant’s right to possession, Landlord, at Tenant’s
sole cost and expense, shall be entitled (but not obligated) to remove and
store Tenant’s Property.  Landlord shall
not be responsible for the value, preservation or safekeeping of Tenant’s
Property.  Tenant shall pay Landlord,
upon demand, the expenses and storage charges incurred. If Tenant fails to
remove Tenant’s Property from the Premises or storage, within thirty (30) days
after notice, Landlord may deem all or any part of Tenant’s Property to be
abandoned and title to Tenant’s Property shall vest in Landlord.


 


26.                               Parking.


 


Tenant is specifically granted
non-reserved vehicle access to the parking lot located adjacent to the Building
at a ratio of 3.5 vehicle spaces per each one thousand (1,000) rentable square
feet of the Premises (i.e. non-reserved parking for fifty-three (53) motor
vehicles based upon the Tenant’s occupancy of 14,907 rentable square feet; the
foregoing referred to herein as “Tenant’s
Parking Rights”).   Tenant’s
Parking Rights shall be non-transferable (directly or indirectly) to any other
institutions, entities or individuals. 
Overnight parking at the Building shall be strictly prohibited.


 


Landlord shall not be
responsible for money, jewelry, automobiles or other personal property lost in
or stolen from the parking lot.  Landlord
shall not be liable for any loss, 


 


19

















 


injury or damage to persons
using the parking lot or automobiles or other property thereon, it being agreed
that, to the fullest extent permitted by law, the use of the parking lot and
the parking spaces shall be at the sole risk of Tenant and its employees.  Except for emergency repairs, Tenant and its
employees shall not perform any work on any automobiles while located in the
parking lot.


 


Tenant’s Parking Rights shall
be subject to such reasonable rules and regulations therefor as may be set
and changed with reasonable prior notice by the Landlord from time to time and
uniformly enforced by Landlord during the Term. 
Landlord agrees that such rules and regulations shall be
established and applied by Landlord in a non-discriminatory fashion, such that
all rules and regulations shall be generally applicable to all other
tenants of the Building of a similar nature of Tenant.  Tenant’s Parking Rights above are
non-assignable and intended solely for the use of Tenant’s employees working
from and business invitees to the Premises; and as such Tenant shall not offer
them for “use” or “license” to any other entity, the general public, or any
other tenants of the Building.  All such
appurtenant rights for parking as set forth in this Section are
automatically terminated upon termination of this Lease, and shall have no
separate independent validity or legal standing.  Landlord reserves the right to relocate
and/or temporarily close any or all of the parking facilities to the extent
necessary in the event of a casualty or governmental taking or for maintenance
and repairs of the parking facility provided Landlord shall reopen the same or
provide replacement parking facilities as soon as practicable thereafter.


 


27.                               Landlord’s
Reserved Right.


 


Landlord and Tenant acknowledge
that the Premises are in a Building and Complex which are not open to the
general public. Access to the Building or Complex is restricted to Landlord,
Tenant, their agents, employees and contractors and to their invited visitors.
In the event of a labor dispute including a strike, picketing, informational or
associational activities directed at Tenant or any other tenant, Landlord
reserves the right unilaterally to alter Tenant’s ingress and egress to the
Building or Complex or make any other change in operating conditions to
restrict pedestrian, vehicular or delivery ingress and egress to a particular
location.


 


28.                               Miscellaneous.


 


28.1                           This
Lease shall be interpreted and enforced in accordance with the Laws of the
state or commonwealth in which the Building is located and Landlord and Tenant
hereby irrevocably consent to the jurisdiction and proper venue of such state
or commonwealth.  If any term or
provision of this Lease shall to any extent be void or unenforceable, the
remainder of this Lease shall not be affected. If there is more than one Tenant
or if Tenant is comprised of more than one party or entity, the obligations
imposed upon Tenant shall be joint and several obligations of all the parties
and entities, and requests or demands from any one person or entity comprising
Tenant shall be deemed to have been made by all such persons or entities.  Notices to any one person or entity shall be
deemed to have been given to all persons and entities. Tenant represents and
warrants to Landlord that each individual executing this Lease on behalf of
Tenant is authorized to do so on 


 


20

















 


behalf of Tenant and that Tenant is not, and
the entities or individuals constituting Tenant or which may own or control
Tenant or which may be owned or controlled by Tenant are not, among the individuals
or entities identified on any list compiled pursuant to Executive Order 13224
for the purpose of identifying suspected terrorists.


 


28.2                           If
either party institutes a suit against the other for violation of or to enforce
any covenant, term or condition of this Lease, the prevailing party shall be
entitled to all of its costs and expenses, including, without limitation,
reasonable attorneys’ fees.  Landlord and
Tenant hereby waive any right to trial by jury in any proceeding based upon a
breach of this Lease.  Either party’s
failure to declare a default immediately upon its occurrence, or delay in
taking action for a default, shall not constitute a waiver of the default, nor
shall it constitute an estoppel.


 


28.3                           Whenever
a period of time is prescribed for the taking of an action by Landlord or
Tenant (other than the payment of the Security Deposit or Rent), the period of
time for the performance of such action shall be extended by the number of days
that the performance is actually delayed due to strikes, acts of God, shortages
of labor or materials, war, terrorist acts, civil disturbances and other causes
beyond the reasonable control of the performing party (“Force Majeure”).


 


28.4                           Landlord
shall have the right to transfer and assign, in whole or in part, all of its
rights and obligations under this Lease and in the Building and Complex.  Upon transfer Landlord shall be released from
any further obligations hereunder first arising after the date of such transfer
and Tenant agrees to look solely to the successor in interest of Landlord for
the performance of such obligations, provided that, any successor pursuant to a
voluntary, third party transfer (but not as part of an involuntary transfer
resulting from a foreclosure or deed in lieu thereof) shall have assumed
Landlord’s obligations under this Lease.


 


28.5                           Landlord
has delivered a copy of this Lease to Tenant for Tenant’s review only and the
delivery of it does not constitute an offer to Tenant or an option. Tenant
represents that it has dealt directly with and only with the Broker as a broker
in connection with this Lease.  Tenant
shall indemnify and hold Landlord and the Landlord Related Parties harmless
from all claims of any other brokers claiming to have represented Tenant in
connection with this Lease. Landlord shall indemnify and hold Tenant and the
Tenant Related Parties harmless from all claims of any brokers claiming to have
represented Landlord in connection with this Lease.


 


28.6                           Time
is of the essence with respect to each provision of this Lease. The expiration
of the Term, whether by lapse of time, termination or otherwise, shall not
relieve either party of any obligations which accrued prior to or which may
continue to accrue after the expiration or termination of this Lease.


 


28.7                           Landlord
shall not disturb Tenant’s use of the Premises, subject to the terms of this
Lease, provided Tenant pays the Rent and fully performs all of its covenants
and agreements.  This covenant shall be
binding upon Landlord and its successors (which term shall include Mortgagee
only to the extent set forth in a so-called subordination, 


 


21

















 


non-disturbance and attornment agreement)
only during its or their respective periods of ownership of the Building.


 


28.8                           This
Lease does not grant any rights to light or air over or about the
Building.  Landlord excepts and reserves
exclusively to itself any and all rights not specifically granted to Tenant
under this Lease. This Lease constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings related to the
Premises, including all lease proposals, letters of intent and other
documents.  Neither party is relying upon
any warranty, statement or representation not contained in this Lease.  This Lease may be modified only by a written
agreement signed by an authorized representative of Landlord and Tenant.


 


28.9                           Tenant
shall not record this Lease or any memorandum or notice without Landlord’s
prior written consent; provided, however, Landlord agrees to consent to the
recordation or registration of a memorandum or notice of this Lease, at Tenant’s
cost and expense (and in a form reasonably satisfactory to Landlord), if the
initial term of this Lease or the initial term plus extension terms granted
exceed, in the aggregate, seven (7) years. 
If this Lease is terminated before the Term expires, upon Landlord’s
request the parties shall execute, deliver and record an instrument
acknowledging the above and the date of the termination of this Lease, and
Tenant appoints Landlord its attorney-in-fact in its name and behalf to execute
the instrument if Tenant shall fail to execute and deliver the instrument after
Landlord’s request therefor within ten (10) days.


 


28.10                     Within
fifteen (15) days after Landlord’s request, Tenant will furnish Tenant’s most
recent audited financial statements (including any notes to them) to Landlord,
or, if no such audited statements have been prepared, such other financial
statements (and notes to them) as may have been prepared by an independent
certified public accountant or, failing those, Tenant’s internally prepared
financial statements; provided, however, so long as Tenant is a publicly traded
company, Landlord agrees that the then most recent Form 10-K (or similar
form filed with the SEC) may be provided to Landlord in lieu of such financial
statements. Notwithstanding the foregoing, Tenant shall have no obligation to
provide to Landlord financial statements as provided in the preceding sentence
more often than once per year during the Term. Tenant will discuss its
financial statements with Landlord and will give Landlord access to Tenant’s
books and records in order to enable Landlord to verify the financial
statements. Landlord will not disclose any aspect of Tenant’s financial
statements that Tenant designates to Landlord as confidential except (1) to
Landlord’s lenders or prospective purchasers of the Building, (2) in
litigation between Landlord and Tenant, and (3) if required by court
order.


 


28.11                     Whenever
Tenant requests Landlord to take any action or give any consent required or
permitted under this Lease, Tenant will reimburse Landlord, as Additional Rent,
for Landlord’s reasonable costs incurred in reviewing the proposed action or
consent, including, without limitation, reasonable attorneys’, engineers’ or
architects’ fees, within thirty (30) days after Landlord’s delivery to Tenant
of a statement of such costs. Tenant will be obligated to make such
reimbursement without regard to whether Landlord consents to any such proposed
action.


 


22
















 


28.12       Tenant and its
telecommunications companies, including but not limited to local exchange
telecommunications companies and alternative access vendor services companies
shall have no right of access to and within the Building, for the installation
and operation of telecommunications systems including but not limited to voice,
video, data, and any other telecommunications services provided over wire,
fiber optic, microwave, wireless, and any other transmission systems, for part
or all of Tenant’s telecommunications within the Building and from the Building
to any other location without Landlord’s prior written consent. Landlord shall
not unreasonably withhold its consent to the installation and operation of such
telecommunications systems, telecommunication services and/or transmission
systems if located entirely within the Premises; otherwise, Landlord may
withhold or delay its consent in its sole discretion.


 


28.13       Tenant
acknowledges that the terms and conditions of this Lease are to remain
confidential for Landlord’s benefit, and may not be disclosed by Tenant to
anyone, by any manner or means, directly or indirectly, without Landlord’s
prior written consent except (1) to Tenant’s lenders or in connection with
an Ownership Change by Tenant, (2) in litigation between Landlord and
Tenant, (3) if required by court order, and (4) if required by any
applicable law or regulation (including any SEC regulation). The consent by
Landlord to any disclosures shall not be deemed to be a waiver on the part of
Landlord of any prohibition against any future disclosure.


 


28.14       The term “Hazardous Materials” means any substance,
material, or waste which is now or hereafter classified or considered to be
hazardous, toxic, or dangerous under any Law relating to pollution or the
protection or regulation of human health, natural resources or the environment,
or poses or threatens to pose a hazard to the health or safety of persons on
the Premises or in the Building. Tenant shall not use, generate, store, or
dispose of, or permit the use, generation, storage or disposal of Hazardous
Materials on or about the Premises or the Building except in a manner and
quantity necessary for the ordinary performance of Tenant’s business, and then
in compliance with all Laws. If Tenant breaches its obligations under this
Section, Landlord may immediately take any and all action reasonably
appropriate to remedy the same, including taking all appropriate action to
clean up or remediate any contamination resulting from Tenant’s use,
generation, storage or disposal of Hazardous Materials. Tenant shall defend,
indemnify, and hold harmless Landlord and its representatives and agents from
and against any and all claims, demands, liabilities, causes of action, suits,
judgments, damages and expenses (including attorneys’ fees and cost of clean up
and remediation) arising from Tenant’s failure to comply with the provisions of
this Section. This indemnity provision shall survive termination or expiration
of the Lease.


 


29.          OFAC
Compliance.


 


29.1         As an inducement
to Landlord to enter into this Lease, Tenant represents and warrants that (a) Tenant
and each person, entity, group or nation owning an interest in Tenant or
directly or indirectly controlling Tenant are (i) not currently identified
on the Specially Designated Nationals and Blocked Persons List maintained by
the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) and/or on any other similar list
maintained by OFAC pursuant to any authorizing statute, executive order or
regulation 


 


23

















 


(collectively, the “List”) as a terrorist or other banned or
blocked person, and (ii) not a person, entity, group or nation with whom a
citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law,
regulation, or Executive Order of the President of the United States, (b) none
of the funds or other assets of Tenant constitute property of, or are
beneficially owned, directly or indirectly, by any Embargoed Person (as
hereinafter defined), (c) no Embargoed Person has any interest of any
nature whatsoever in Tenant (whether directly or indirectly), (d) none of
the funds of Tenant have been derived from any unlawful activity with the
result that the investment in Tenant is prohibited by law or that the Lease is
in violation of law, and (e) Tenant has implemented procedures, and will
consistently apply those procedures, to ensure the foregoing representations
and warranties remain true and correct at all times.  The term “Embargoed
Person” means any person, entity or government subject to trade
restrictions under U.S. law, including but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder with the result that the investment in Tenant is
prohibited by law or Tenant is in violation of law.  In connection with the foregoing, it is
expressly understood and agreed that (x) any breach by Tenant of the
foregoing representations and warranties shall be deemed an immediate default
under this Lease (without the benefit of notice or grace) and shall be covered
by the indemnity provisions of this Lease, and (y) the representations and
warranties contained in this subsection shall be continuing in nature and shall
survive the expiration or earlier termination of this Lease.


 


29.2         Tenant
covenants and agrees (a) to comply with all requirements of law relating
to money laundering, anti-terrorism, trade embargoes and economic sanctions,
now or hereafter in effect, (b) to immediately notify Landlord in writing
if any of the representations, warranties or covenants set forth in this paragraph
or the preceding paragraph are no longer true or have been breached or if
Tenant has a reasonable basis to believe that they may no longer be true or
have been breached, (c) not to use funds from any “Prohibited Person” (as
such term is defined in the September 24, 2001 Executive Order Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism) to make any payment due to Landlord under the
Lease and (d) at the request of Landlord, to provide such information as
may be requested by Landlord to determine Tenant’s compliance with the terms
hereof.


 


29.3         Tenant hereby
acknowledges and agrees that Tenant’s inclusion on the List at any time during
the Lease Term shall be a material default of the Lease.  Notwithstanding anything herein to the
contrary, Tenant shall not permit the Premises or any portion thereof to be
used or occupied by any person or entity on the List or by any Embargoed Person
(on a permanent, temporary or transient basis), and any such use or occupancy
of the Premises by any such person or entity shall be a material default of the
Lease.


 


30.          Antenna.


 


Subject to any rights
previously given by Landlord to other parties and otherwise subject to such
reasonable rules and regulations as Landlord may promulgate from time to
time for the purpose of safety and frequency management, Tenant may continue to
maintain 


 


24

















 


Tenant’s existing dome antenna
(the “Antenna”) serving the
Premises on top of the Building throughout the Term of this Lease and any
renewals or extension thereof subject to the following conditions:  (i) Tenant shall maintain the Antenna at
its sole cost and expense in a safe condition and good repair throughout the
Term; (ii) prior to any work to be performed on the Antenna, Tenant shall
submit to Landlord for its review and approval (which approval shall not be
unreasonably withheld, conditioned or delayed) plans and specifications for
such work in accordance with the reasonable direction of Landlord relative
thereto; (iii) Tenant shall obtain all the necessary permits and approvals
which may be required from all lawful authorities (including those responsible
for overseeing historical structures) for the continued use of such Antenna;
and (iv) as a condition to such continued use of the Antenna, during such
time as Landlord is performing Landlord’s Work, Tenant shall, at Tenant’s sole
cost and expense relocate the cable(s) connecting the Antenna and Tenant’s
Premises (and relocate the Antenna to an alternate location on the top of the
Building, in a location reasonably designated by Landlord, if necessary) such
that no portion of such cable passes through the premises of any tenant
adjacent to the Premises (including without limitation the space in the
Building Tenant is vacating under the Sublease referenced in 3.1 above);
provided, however, that the cable may pass through the conduit in which it is
currently located into the electrical room on the first floor of the Building
and through the ceiling of the Premises adjacent to Tenant’s Premises (the “Antenna Cable”).  In the event Tenant desires to access the
Antenna Cable, Tenant shall coordinate such access through Landlord and shall
have no right to independently access the adjacent Premises.  In addition, Landlord reserves the right to
relocate the Antenna Cable, at Landlord’s expense, to alternate locations
reasonably determined by Landlord.  In
the event that Landlord performs repairs to or replaces the roof, Tenant shall,
at Tenant’s cost, remove the Antenna and relocate it to an alternate location
reasonably designated by Landlord and reasonably acceptable to Tenant until
such time as Landlord has completed such repairs or replacements.  The Antenna shall be removed by Tenant, at Tenant’s
cost, in a good and workmanlike manner upon the expiration or sooner
termination of this Lease.


 


Accompanied by a representative
of Landlord, Tenant or Tenant’s representatives may, at reasonable times during
the Term, gain access to the Antenna for the inspection, maintenance, repair,
replacement or removal of same.  Any
penetrations to the roof of the Building authorized under this Section 30,
at Landlord’s election, shall be performed by Landlord’s roofing
contractor.  To the extent not inconsistent
with this Section 30, Section 9 of this Lease shall govern the
performance of any work authorized under this Section 30 and Landlord’s
and Tenant’s respective rights and obligations regarding such work.


 


25

















 


Landlord and Tenant have
executed this Lease as of the day and year first above written.


 


	
  WITNESS/ATTEST:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  /s/ Laura
  Allen

  	
   

  	
  NORMANDY
  NICKERSON ROAD, LLC, a

  
	
   

  	
  Delaware
  limited liability company

  
	
  Name
  (print):

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raymond
  P. Trevisan

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS/ATTEST:

  	
  TENANT:

  
	
  /s/ Karen
  Hicks

  	
   

  	
  BIO-KEY
  INTERNATIONAL, INC., a Delaware

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
  Name
  (print):

  	
   

  	
   

  	
  By:

  	
  /s/ Francis
  J. Cusick 

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  41-1741861

  
	
   

  	
  Tenant’s Tax
  ID Number (SSN or FEIN)

  



 


26

















 


EXHIBIT
A


 


OUTLINE AND LOCATION OF PREMISES


 





 


27

















 


EXHIBIT B


 


EXPENSES AND TAXES


 


This Exhibit is attached
to and made a part of the Lease by and between NORMANDY NICKERSON ROAD, LLC, a
Delaware limited liability company (“Landlord”) and BIO-KEY INTERNATIONAL,
INC., a Delaware corporation  (“Tenant”)
for space in the Building located at 300
Nickerson Road, Marlborough, Massachusetts 01752.


 


1.             Payments.


 


1.1           Tenant
shall pay Tenant’s Pro Rata Share of the amount, if any, by which Expenses
(defined below) for each calendar year during the Term exceed Expenses for the
Base Year (the “Expense Excess”)
and also the amount, if any, by which Taxes (defined below) for each Fiscal
Year during the Term exceed Taxes for the Base Year (the “Tax Excess”).  If Expenses or Taxes in any calendar year or
Fiscal Year decrease below the amount of Expenses or Taxes for the Base Year,
Tenant’s Pro Rata Share of Expenses or Taxes, as the case may be, for that
calendar year or Fiscal Year shall be $0. 
Landlord shall provide Tenant with a good faith estimate of the Expense
Excess and of the Tax Excess for each calendar year or Fiscal Year during the
Term.  On or before the first day of each
month, Tenant shall pay to Landlord a monthly installment equal to one-twelfth
of Tenant’s Pro Rata Share of Landlord’s estimate of both the Expense Excess
and Tax Excess. After its receipt of the revised estimate, Tenant’s monthly
payments shall be based upon the revised estimate.  If Landlord does not provide Tenant with an
estimate of the Expense Excess or the Tax Excess by January 1 of a
calendar year, Tenant shall continue to pay monthly installments based on the
previous year’s estimate(s) until Landlord provides Tenant with the new
estimate.


 


1.2           As soon as
is practical following the end of each calendar year or Fiscal Year, as the
case may be, Landlord shall furnish Tenant with a statement of the actual
Expenses and Expense Excess and the actual Taxes and Tax Excess for the prior
calendar year or Fiscal Year, as the case may be.  If the estimated Expense Excess or estimated
Tax Excess for the prior calendar year or Fiscal Year, as the case may be, is
more than the actual Expense Excess or actual Tax Excess for the prior calendar
year or Fiscal Year, as the case may be, Landlord shall either provide Tenant
with a refund or apply any overpayment by Tenant against Additional Rent due or
next becoming due, provided if the Term expires before the determination of the
overpayment, Landlord shall refund any overpayment to Tenant after first
deducting the amount of Rent due.  If the
estimated Expense Excess or estimated Tax Excess for the prior calendar year or
Fiscal Year, as the case may be, is less than the actual Expense Excess or
actual Tax Excess, for such prior calendar year or Fiscal year, as the case may
be, for such prior year, Tenant shall pay Landlord, within thirty (30) days
after its receipt of the statement of Expenses or Taxes, any underpayment for
the prior calendar year.  This provision
shall survive the termination or earlier expiration of the Lease.


 


28

















 


2.             Expenses.


 


2.1           “Expenses” means all costs and expenses
incurred in each calendar year in connection with operating, maintaining,
repairing, and managing the Building and/or Complex.  Expenses include, without limitation: (a) all
labor and labor related costs; (b) management fees; (c) the cost of
equipping, staffing and operating an on-site and/or off-site management office;
(d) accounting costs; (e) the cost of services; (f) rental and
purchase cost of parts, supplies, tools and equipment; (g) insurance
premiums and deductibles; (h) electricity, gas and other utility costs;
and (i) the amortized cost of capital improvements (as distinguished from
replacement parts or components installed in the ordinary course of business)
made subsequent to the Base Year which are: 
(1) performed primarily to reduce current or future operating expense
costs, upgrade security or otherwise improve the operating efficiency of the
Building and/or Complex; or (2) required to comply with any Laws that are
enacted, or first interpreted to apply to the Building and/or Complex, after
the date of this Lease.  The cost of
capital improvements shall be amortized by Landlord over the lesser of the
Payback Period (defined below) or the useful life of the capital improvement as
reasonably determined by Landlord. “Payback
Period” means the reasonably estimated period of time that it takes
for the cost savings resulting from a capital improvement to equal the total
cost of the capital improvement. Landlord, by itself or through an affiliate,
shall have the right to directly perform, provide and be compensated for any
services under this Lease.   Any Expenses
generally applicable to the Complex as a whole or any portion thereof shall be
equitably prorated and Tenant’s initial Pro-Rata Share of such Expenses shall
be as set forth in Section 1.4 of the Lease.  If Landlord incurs Expenses for the Building
and/or Complex together with one or more other buildings or properties, whether
pursuant to a reciprocal easement agreement, common area agreement or
otherwise, the shared costs and expenses shall be equitably prorated and
apportioned between the Building, Complex and the other buildings or
properties.


 


2.2           Expenses
shall not include: the cost of capital improvements (except as set forth
above); depreciation; principal payments of mortgage and other non-operating
debts of Landlord; the cost of repairs or other work to the extent Landlord is
reimbursed by insurance, condemnation proceeds or other third parties; costs in
connection with leasing space in the Building and/or Complex, including
brokerage commissions; lease concessions, rental abatements and construction
allowances granted to specific tenants; costs incurred in connection with the
sale, financing or refinancing of the Building and/or Complex; fines, interest
and penalties incurred due to the late payment of Taxes or Expenses;
organizational expenses associated with the creation and operation of the
entity which constitutes Landlord; any penalties or damages that Landlord pays
to Tenant under this Lease or to other tenants in the Building and/or Complex
under their respective leases; or any fines or penalties incurred on account of
violations by Landlord of any governmental rule or requirement.


 


2.3           If at any
time during a calendar year the Building and/or Complex is not at least 95%
occupied or Landlord is not supplying services to at least 95% of the total
Rentable Square Footage of the Building and/or Complex, Expenses shall, at
Landlord’s option, be 


 


29

















 


determined as if the Building and/or Complex, as applicable, had been
95% occupied and Landlord had been supplying services to 95% of the Rentable
Square Footage of the Building and/or Complex. 
If Expenses for a calendar year are determined as provided in the prior
sentence, Expenses for the Base Year shall also be determined in such manner.
Notwithstanding the foregoing, Landlord may calculate the extrapolation of
Expenses under this Section based on 100% occupancy and service so long as
such percentage is used consistently for each year of the Term.  Landlord shall not recover as Expenses more
than 100% of the Expenses actually paid by Landlord.


 


3.             “Taxes” shall
mean:  (a) all real property taxes
and other assessments on the Building and/or Complex, including, but not
limited to, gross receipts taxes, assessments for special improvement districts
and building improvement districts, governmental charges, fees and assessments
for police, fire, traffic mitigation or other governmental service of purported
benefit to the Complex, taxes and assessments levied in substitution or
supplementation in whole or in part of any such taxes and assessments and the
Complex’s share of any real estate taxes and assessments under any reciprocal
easement agreement, common area agreement or similar agreement as to the
Complex; (b) all personal property taxes for property that is owned by
Landlord and used in connection with the operation, maintenance and repair of
the Complex; and (c) all costs and fees incurred in connection with
seeking reductions in any tax liabilities described in (a) and (b),
including, without limitation, any costs incurred by Landlord for compliance,
review and appeal of tax liabilities. 
Without limitation, Taxes shall not include any income, capital levy,
transfer, capital stock, gift, estate or inheritance tax.  If a change in Taxes is obtained for any year
of the Term during which Tenant paid Tenant’s Pro Rata Share of any Tax Excess,
then Taxes for that year will be retroactively adjusted and Landlord shall
provide Tenant with a credit, if any, based on the adjustment.  Likewise, if a change is obtained for Taxes
for the Base Year, Taxes for the Base Year shall be restated and the Tax Excess
for all subsequent years shall be recomputed. 
Tenant shall pay Landlord the amount of Tenant’s Pro Rata Share of any
such increase in the Tax Excess within thirty (30) days after Tenant’s receipt
of a statement from Landlord.


 


4.             Audit Rights.  Tenant, within ninety (90) days after
receiving Landlord’s statement of Expenses, may give Landlord written notice (“Review
Notice”) that Tenant intends to review
Landlord’s records of the Expenses for the calendar year to which the statement
applies.  Within a reasonable time after
receipt of the Review Notice, Landlord shall make all pertinent records
available for inspection that are reasonably necessary for Tenant to conduct
its review.  If any records are
maintained at a location other than the management office for the Building,
Tenant may either inspect the records at such other location or pay for the
reasonable cost of copying and shipping the records.  If Tenant retains an agent to review Landlord’s
records, the agent must be with a CPA firm licensed to do business in the state
or commonwealth where the Building is located. 
Tenant shall be solely responsible for all costs, expenses and fees
incurred for the audit.  Within ninety
(90) days after the records are made available to Tenant, Tenant shall have the
right to give Landlord written notice (an “Objection Notice”) stating in reasonable detail any objection to
Landlord’s statement of Expenses for that year. If Tenant fails to give
Landlord an Objection Notice within the 90-day period or fails to provide
Landlord 


 


30

















 


with a Review Notice within the 90-day period
described above, Tenant shall be deemed to have approved Landlord’s statement
of Expenses and shall be barred from raising any claims regarding the Expenses
for that year.  The records obtained by
Tenant shall be treated as confidential. 
In no event shall Tenant be permitted to examine Landlord’s records or
to dispute any statement of Expenses unless Tenant has paid and continues to
pay all Rent when due.


 


31

















 


EXHIBIT
C


 


[Intentionally
Omitted]


 


32
















 


EXHIBIT
D


 


COMMENCEMENT
LETTER


 


(EXAMPLE)


 


	
  Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tenant

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


Re:          Commencement Letter with
respect to that certain Lease dated as of the
           day of
                    ,
2008, by and between NORMANDY NICKERSON ROAD, LLC, a Delaware limited liability
company (“Landlord”) and BIO-KEY INTERNATIONAL, INC., a Delaware corporation (“Tenant”)
for 14,907 rentable square feet on the first floor of Building located at 300
Nickerson Road, Marlborough, Massachusetts 01752.


 


Dear                                            :


 


In accordance with the terms
and conditions of the above referenced Lease, Tenant accepts possession of the
Premises and agrees:


 


1.             The Commencement Date of the
Lease is
                                                ;


 


2.             The Termination Date of the
Lease is
                                                        .


 


Please acknowledge your
acceptance of possession and agreement to the terms set forth above by signing
all 3 counterparts of this Commencement Letter in the space provided and
returning 2 fully executed counterparts to my attention.


 


Sincerely,


 


 


	
  Authorized Signatory

  	
   

  



 


Agreed and Accepted:


 


	
  Tenant:

  	
  BIO-key
  International, Inc.

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  



 


33

















 


EXHIBIT
E


 


BUILDING
RULES AND REGULATIONS


 


The following rules and
regulations shall apply, where applicable, to the Premises, the Building, the
parking facilities (if any), the Complex and the appurtenances.  In the event of a conflict between the
following rules and regulations and the remainder of the terms of the
Lease, the remainder of the terms of the Lease shall control.  Capitalized terms have the same meaning as
defined in the Lease.


 


1.             Sidewalks,
doorways, vestibules, halls, stairways and other similar areas shall not be
obstructed by Tenant or used by Tenant for any purpose other than ingress and
egress to and from the Premises.  No
rubbish, litter, trash, or material shall be placed, emptied, or thrown in
those areas.  At no time shall Tenant
permit Tenant’s employees to loiter in Common Areas or elsewhere about the
Building or Complex.


 


2.             Plumbing
fixtures and appliances shall be used only for the purposes for which designed
and no sweepings, rubbish, rags or other unsuitable material shall be thrown or
placed in the fixtures or appliances. 
Damage resulting to fixtures or appliances by Tenant, its agents,
employees or invitees shall be paid for by Tenant and Landlord shall not be
responsible for the damage.


 


3.             No
signs, advertisements or notices shall be painted or affixed to windows, doors
or other parts of the Building or Complex, except those of such color, size,
style and in such places as are first approved in writing by Landlord.  All tenant identification and suite numbers
at the entrance to the Premises shall be installed by Landlord, at Tenant’s
cost and expense, using the standard graphics for the Building. Except in
connection with the hanging of lightweight pictures and wall decorations, no
nails, hooks or screws shall be inserted into any part of the Premises or
Building except by the Building maintenance personnel without Landlord’s prior
approval, which approval shall not be unreasonably withheld.


 


4.             Landlord
may provide and maintain in the first floor (main lobby) of the Building an
alphabetical directory board or other directory device listing tenants and no
other directory shall be permitted unless previously consented to by Landlord
in writing.


 


5.             Tenant
shall not place any lock(s) on any door in the Premises or Building
without Landlord’s prior written consent, which consent shall not be
unreasonably withheld, and Landlord shall have the right at all times to retain
and use keys or other access codes or devices to all locks within and into the
Premises.  A reasonable number of keys to
the locks on the entry doors in the Premises shall be furnished by Landlord to
Tenant at Tenant’s cost and Tenant shall not make any duplicate keys.  All keys shall be returned to Landlord at the
expiration or early termination of the Lease.


 


6.             All
contractors, contractor’s representatives and installation technicians
performing work in the Building shall be subject to Landlord’s prior approval,
which approval shall not be unreasonably withheld, and shall be required to
comply with Landlord’s standard rules, 


 


34

















 


regulations,
policies and procedures, which may be revised from time to time. Landlord has
no obligation to allow any particular telecommunication service provider to
have access to the Buildings or to the Premises.  If Landlord permits access, Landlord may
condition the access upon the payment to Landlord by the service provider of
fees assessed by Landlord in Landlord’s sole discretion.


 


7.             Movement
in or out of the Building of furniture or office equipment, or dispatch or
receipt by Tenant of merchandise or materials requiring the use of elevators,
stairways, lobby areas or loading dock areas, shall be restricted to hours
reasonably designated by Landlord. 
Tenant shall obtain Landlord’s prior approval by providing a detailed
listing of the activity, which approval shall not be unreasonably
withheld.  If approved by Landlord, the
activity shall be under the supervision of Landlord and performed in the manner
required by Landlord.  Tenant shall
assume all risk for damage to articles moved and injury to any persons
resulting from the activity.  If
equipment, property, or personnel of Landlord or of any other party is damaged
or injured as a result of or in connection with the activity, Tenant shall be
solely liable for any resulting damage, loss or injury.


 


8.             Landlord
shall have the right to approve the weight, size, or location of heavy
equipment or articles in and about the Premises, which approval shall not be
unreasonably withheld.  Damage to the
Building or Complex by the installation, maintenance, operation, existence or
removal of Tenant’s Property shall be repaired at Tenant’s sole expense.


 


9.             Corridor
doors, when not in use, shall be kept closed.


 


10.           Tenant
shall not:  (1) make or permit by
those claiming under Tenant any improper, objectionable or unpleasant noises or
odors in the Building, or otherwise interfere in any way with other tenants or
persons having business with them; (2) solicit business or distribute or
cause to be distributed, in any portion of the Building or Complex, handbills,
promotional materials or other advertising; or (3) conduct or permit by
those claiming under Tenant other activities in the Building or Complex that
might, in Landlord’s sole opinion, constitute a nuisance.


 


11.           No
animals, except those assisting handicapped persons, shall be brought into the
Building or Complex or kept in or about the Premises.


 


12.           No
inflammable, explosive or dangerous fluids or substances shall be used or kept
by Tenant in the Premises, Building or about the Complex, except for those
substances as are typically found in similar premises used for general office
purposes and are being used by Tenant in a safe manner and in accordance with
all applicable Laws.  Tenant shall not,
without Landlord’s prior written consent, use, store, install, spill, remove,
release or dispose of, within or about the Premises or any other portion of the
Complex, any asbestos-containing materials or any solid, liquid or gaseous
material now or subsequently considered toxic or hazardous under the provisions
of 42 U.S.C. Section 9601 et seq., M.G.L. c. 21C, M.G.L. c. 21E or any
other applicable environmental Law which may now or later be in effect.  Tenant shall comply with all Laws pertaining
to and 


 


35

















 


governing the
use of these materials by Tenant and shall remain solely liable for the costs
of abatement and removal.


 


13.           Tenant
shall not use or occupy the Premises in any manner or for any purpose which
might injure the reputation or impair the present or future value of the
Premises, the Building or the Complex. Tenant shall not use, or permit any part
of the Premises to be used for lodging, sleeping or for any illegal purpose.


 


14.           Tenant
shall not take any action which would violate Landlord’s labor contracts or
which would cause a work stoppage, picketing, labor disruption or dispute or
interfere with Landlord’s or any other tenant’s or occupant’s business or with
the rights and privileges of any person lawfully in the Building or Complex (“Labor Disruption”).  Tenant shall take the actions necessary to
resolve the Labor Disruption, and shall have pickets removed and, at the
request of Landlord, immediately terminate any work in the Premises that gave
rise to the Labor Disruption, until Landlord gives its written consent for the
work to resume.  Tenant shall have no
claim for damages against Landlord or any of the Landlord Related Parties nor
shall the Commencement Date of the Term be extended as a result of the above
actions.


 


15.           Tenant
shall not install, operate or maintain in the Premises or in any other area of
the Building or Complex, electrical equipment that would overload the
electrical system beyond its capacity for proper, efficient and safe operation
as determined solely by Landlord.  Tenant
shall not furnish cooling or heating to the Premises, including, without
limitation, the use of electronic or gas heating devices, without Landlord’s
prior written consent.  Tenant shall not
use more than its proportionate share of telephone lines and other
telecommunication facilities available to service the Building.


 


16.           Tenant
shall not operate or permit to be operated a coin or token operated vending
machine or similar device (including, without limitation, telephones, lockers,
toilets, scales, amusement devices and machines for sale of beverages, foods,
candy, cigarettes and other goods), except for machines for the exclusive use
of Tenant’s employees and invitees.


 


17.           Bicycles
and other vehicles are not permitted inside the Building or on the walkways
outside the Building, except in areas designated by Landlord.


 


18.           Landlord
may from time to time adopt systems and procedures for the security and safety
of the Complex, the Building, its occupants, entry, use and contents.  Tenant, its agents, employees, contractors,
guests and invitees shall comply with Landlord’s systems and procedures.


 


19.           Landlord
shall have the right to prohibit the use of the name of the Complex, the
Building or any other publicity by Tenant that in Landlord’s sole opinion may
impair the reputation of the Complex, the Building or their desirability.  Upon written notice from Landlord, Tenant
shall refrain from and discontinue such publicity immediately.


 


36

















 


20.           Neither
Tenant nor its agents, employees, contractors, guests or invitees shall smoke
or permit smoking in the Common Areas, unless a portion of the Common Areas
have been declared a designated smoking area by Landlord, nor shall the above
parties allow smoke from the Premises to emanate into the Common Areas or any
other part of the Building.  Landlord
shall have the right to designate the Building (including the Premises) as a non-smoking
building.


 


21.           Landlord
shall have the right to designate and approve standard window coverings for the
Premises and to establish rules to assure that the Building presents a
uniform exterior appearance.  Tenant
shall ensure, to the extent reasonably practicable, that window coverings are
closed on windows in the Premises while they are exposed to the direct rays of
the sun.


 


22.           Deliveries
to and from the Premises shall be made only at the times in the areas and
through the entrances and exits reasonably designated by Landlord.  Tenant shall not make deliveries to or from
the Premises in a manner that might interfere with the use by any other tenant
of its premises or of the Common Areas, any pedestrian use, or any use which is
inconsistent with good business practice.


 


23.           The
work of cleaning personnel shall not be hindered by Tenant after 5:30 p.m.,
and cleaning work may be done at any time when the offices are vacant. Windows,
doors and fixtures may be cleaned at any time. 
Tenant shall provide adequate waste and rubbish receptacles to prevent
unreasonable hardship to the cleaning service.


 


37

















 


EXHIBIT
F


 


LANDLORD’S
WORK


 


This Exhibit is attached
to and made a part of the Lease by and between NORMANDY NICKERSON ROAD, LLC, a
Delaware limited liability company (“Landlord”)
and BIO-KEY INTERNATIONAL, INC., a Delaware corporation (“Tenant”) for space in the Building located
at 300 Nickerson Road, Marlborough,
Massachusetts 01752.


 


Landlord and Tenant have
attached to this Lease as Exhibit F-1 preliminary plans and specifications
for the construction of the Premises (the “Landlord
Work”) which have been approved by Landlord and Tenant (the “Plans”). 
Subject to Tenant’s delivery of $3,000 to Landlord as Tenant’s
contribution for installation of electrical outlets set forth in item 13 of Exhibit F-1
prior to commencement of construction, Landlord agrees to construct the
Premises on a “turnkey basis” in accordance with the Plans, which construction
shall be completed in a good and workmanlike manner and in compliance with all
applicable laws and regulations.


 


In the event Tenant desires any
changes to the Plans, Tenant shall submit to Landlord proposed changes to the
Plans.  Within five (5) business
days after receipt of any proposed changes from Tenant, Landlord shall approve
or reject same and if rejecting same, shall state the reasons for such
rejection, and Landlord’s approval shall not be unreasonably withheld or
delayed, except that Landlord shall have complete discretion with regard to
granting or withholding approval of the portions of the changes to the extent
the they would impact the Building’s structure or systems, affect future
marketability of the Premises or Building or would be visible from the common
facilities or exterior of the Building. 
Landlord shall, upon granting of any approval, notify Tenant of the
amount of additional cost arising therefrom, if any, which shall include
Landlord’s designated contractor’s Profit of ten percent (10%) (“Additional Construction Cost”), which Tenant
shall pay to Landlord upon demand, and the amount of additional time required
by Landlord to implement and complete said changes.   Tenant reserves the right to approve the
undertaking of such subcontractor work within five (5) business days of
the date Landlord provides Tenant with the Additional Construction Cost.  If Tenant fails to notify Landlord in writing
that Tenant does not approve such contractor work, Tenant shall be deemed to
have approved same. Tenant hereby acknowledges that any failure by Tenant to
approve such subcontractor work may result in a delay in completion of the
Landlord’s Work.  In the event of a
rejection by Landlord of any proposed changes, Tenant may revise such changes
and re-submit them pursuant hereto.  No
plans submitted to Landlord shall be considered to be Plans unless they are
submitted to Landlord signed and in proper and sufficient form for Landlord to
obtain all necessary permits and approvals to construct the Premises in
accordance with such Plans.  All change
order requests and information pertaining thereto shall be conveyed to Landlord
by
                              ,
Tenant’s designated representative.


 


In the event Tenant desires any
change in the Plans, Tenant shall submit to Landlord together with the proposed
changes, instructions to Landlord as to whether to cease work or cease any
segment of work while the change is in the approval process or whether Landlord
should continue constructing the Premises in accordance with the Plans
notwithstanding the proposed changes thereto. 
In the event no such instructions are given, Landlord shall continue
constructing the Premises in accordance with the Plans without regard to the
proposed changes 


 

















 


thereto.  If Landlord has stopped work, or some segment
thereof at Tenant’s request, Landlord shall not recommence same until Landlord
receives written instructions from Tenant authorizing the recommencement of
such work.  Upon the granting of any
approval, Landlord shall notify Tenant of Landlord’s estimate of the delay in
completion that will be caused by such proposed revision of the Plans.  In the event of a rejection by Landlord of a
proposed revision, Tenant may make changes to the proposed revision and
resubmit it pursuant hereto.  Upon
receiving Landlord’s approval to any revision, Tenant shall, as soon thereafter
as practicable, but in no event in excess of five (5) business days, and
understanding that any delay in responding may cause delays in completion
substantially greater than the estimate given by Landlord, authorize the work
that Tenant desires by approving in writing the work and the cost thereof, and
submitting to Landlord signed revised Plans sufficient for Landlord to obtain
all necessary permits and approvals to construct the Premises in accordance with
such revised plans.  Upon the submission
of such revised plans, such revised plans shall become the Plans hereunder.


 

















 


EXHIBIT
F-1


 


SPACE
PLAN


 





 

















 


EXHIBIT
F-1


 


SPECIFICATIONS


 


PROPOSED TENANT
IMPROVEMENTS FOR


BIO-KEY


300 Nickerson Road,
Marlboro MA


6-3-2008


 


Referenced floor plan:


SP1 dated 5-9-2008


 


1. Demolition:


Remove all items required by
new layout.


 


2. Interior Partitions:


New interior walls shall be
constructed of 3-5/8” x 25 Ga. metal studs at 16” O/C with 1/2” gypsum
wallboard on both sides. Walls shall extend to 6” above the ceiling grid.


New demising wall (and portions
of existing walls which will become demising walls) shall be full height.


 


3. Doors, Frames and Hardware:


Reuse existing doors, frames
and hardware wherever possible. Provide new units (to match existing) as
required by new layout.  Side light
windows shall be installed adjacent to each new interior doorway (not to exceed
a total of 3 side light windows).


 


4. Ceilings:


Existing tiles and grid to
remain and be repaired, with new suspended ceiling system (to match adjacent
areas) only as required by new layout.


 


5. Lighting:


 


Existing fixtures shall be
reused. Provide new fixtures (to match existing) as required by new layouts.
Each room and area shall be individually switched.


 


6. Power:


Separate power and lighting
circuits for this Tenant and provide “Emon Demon” metering of all power/lighting
panels.


 


7. HVAC:


Existing system diffusers and
ductwork will be relocated, with new ductwork for supplemental cooling,
diffusers, controls & equipment as required by new layout.  Current 2-ton and 3-ton HVAC units owned by
Tenant and servicing Tenant’s current QA labs to be redirected as follows (see
attached diagram Exhibit F-2):


 


· 3-ton:
New QA labs (Rooms 1A & 1B)


· 2-ton:
IT Network Room


· Current
House HVAC will provide supplemental air to Rooms 1A and 1B


 

















 


8.
Plumbing


No Work.


 


9. Floor Finishes:


Repair existing flooring
damaged by demolition and new work


Provide base to match existing
on new walls.


 


10. Paint:


Paint new walls, doors and
frames to match existing.


 


11. Fire Protection:


Existing sprinkler system to be
modified as required by new layout


 


12. Life Safety:


Modify existing fire alarm
devices, emergency lighting and exit signs as required by new layout.


 


13.           Electrical outlets


The following electrical outlets shall be installed (with Tenant
contribution of $3,000) as shown on the diagram attached as Exhibit F-3:


 


IT Room


 


· Four
sets of 2 side-by-side 30amp outlets installed on combination of west and north
walls.


 


QA Labs


 


A.            Room 1A


 


· Two 20amp outlets installed on east wall (4 plugs per
outlet)


· Five 20amp outlets installed west wall (new permanent wall
between 1A & 1B) (4 plugs per outlet)


 


B.            Room 1B


 


· Five
20amp outlets installed east wall (new permanent wall between 1A & 1B)
(4 plugs per outlet)


· Five
20amp outlets installed west wall (new permanent wall between 1B and Training
Room) (4 plugs per outlet)


 


Training Room


 


· Three
20amp outlets installed east wall (new permanent wall between 1B and Training
Room) (4 plugs per outlet)


 


14. Work not included:


Installation of telephone and
computer wiring.


Furnishings including, but not
limited to, open office work stations and reception desk.


Security system.


 


END


 
















 


EXHIBIT
F-2


 

















 


EXHIBIT
F-2


 





 

















 


EXHIBIT
F-3


 





 

















 


EXHIBIT
G


 


FORM OF
LETTER OF CREDIT


 


[Name of Financial Institution]


 


	
   

  	
  Irrevocable Standby

  
	
   

  	
  Letter of Credit

  
	
   

  	
  No.

  	
   

  
	
   

  	
  Issuance Date:

  	
   

  
	
   

  	
  Expiration Date:

  	
   

  
	
   

  	
  Applicant:

  	
   

  
						



 


Beneficiary


 


Normandy Nickerson Road, LLC


1776 On the Green


67 Park Place East


Morristown, NJ 07960


Attention:  Raymond P. Trevisan


   Principal,
General Counsel


 


Ladies/Gentlemen:


 


We hereby establish our
Irrevocable Standby Letter of Credit in your favor for the account of the above
referenced Applicant in the amount of 
                                        
U.S. Dollars
($                                        )
available for payment at sight by your draft drawn on us when accompanied by
the following documents:


 


An original copy of this
Irrevocable Standby Letter of Credit.


 


Beneficiary’s dated statement
purportedly signed by an authorized signatory or agent reading: “This draw in
the amount of
                                            
U.S. Dollars
($                        )
under your Irrevocable Standby Letter of Credit No.                                         
represents funds due and owing to us pursuant to the terms of that certain
lease by and between
                                            ,
as landlord, and                           ,
as tenant, and/or any amendment to the lease or any other agreement between
such parties related to the lease.”


 


It is a condition of this
Irrevocable Standby Letter of Credit that it will be considered automatically
renewed for a one year period upon the expiration date set forth above and upon
each anniversary of such date, unless at least 60 days prior to such expiration
date or applicable anniversary thereof, we notify you in writing by certified
mail return receipt requested or by recognized overnight courier service, that
we elect not to so renew this Irrevocable Standby Letter of Credit.   In addition to the foregoing, we understand
and agree that you shall be entitled to draw upon this Irrevocable Standby
Letter of Credit in accordance with 1 and 2 above in the 


 

















 


event that we elect not to
renew this Irrevocable Standby Letter of Credit and, in addition, you provide
us with a dated statement purportedly signed by an authorized signatory or
agent of Beneficiary stating that the Applicant has failed to provide you with
an acceptable substitute irrevocable standby letter of credit in accordance
with the terms of the above referenced lease. 
We further acknowledge and agree that: 
(a) upon receipt of the documentation required herein, we will
honor your draws against this Irrevocable Standby Letter of Credit without
inquiry into the accuracy of Beneficiary’s signed statement and regardless of
whether Applicant disputes the content of such statement; (b) this
Irrevocable Standby Letter of Credit shall permit partial draws and, in the
event you elect to draw upon less than the full stated amount hereof, the
stated amount of this Irrevocable Standby Letter of Credit shall be
automatically reduced by the amount of such partial draw; and (c) you
shall be entitled to transfer your interest in this Irrevocable Standby Letter
of Credit from time to time and more than one time without our approval and
without charge.  In the event of a
transfer, we reserve the right to require reasonable evidence of such transfer
as a condition to any draw hereunder.


 


This Irrevocable Standby Letter
of Credit is subject to the Uniform Customs and Practice for Documentary
Credits (1993 revision) ICC Publication No. 500.


 


We hereby engage with you to
honor drafts and documents drawn under and in compliance with the terms of this
Irrevocable Standby Letter of Credit.


 


All communications to us with
respect to this Irrevocable Standby Letter of Credit must be addressed to our
office located at
                                                                                            
to the attention of                                                                     .


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [name]

  
	
   

  	
  [title]