Document:

Exhibit 10.11

 

EXECUTIVE RETENTION AGREEMENT

 

This Executive Retention Agreement (the “Agreement”) is made and entered into as of November 9, 2009, by and between Planet Payment, Inc., a Delaware corporation (the “Company”), and Robert J. Cox (the “Executive”).

 

Recitals:

 

WHEREAS, the Executive is a key employee of the Company who possesses valuable proprietary knowledge of the Company, its business and operations and the markets in which the Company competes; and

 

WHEREAS, the Company and the Executive are concurrently entering into a Non-Competition Agreement, and payment of benefits to the Executive hereunder in certain circumstances shall be made in consideration of the Executive having agreed to enter into the Non-Competition Agreement; and

 

WHEREAS, the Company and the Executive desire to enter into this Agreement to encourage the Executive to continue to devote the Executive’s full attention and dedication to the success of the Company, and to provide specified compensation and benefits to the Executive in the event of a Termination Upon Change of Control or certain other terminations pursuant to the terms of this Agreement.

 

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

 

1.                                       PURPOSE AND TERM

 

The purpose of this Agreement is to provide specified compensation and benefits to the Executive in the event of (i) a Termination Upon Change of Control or (ii) an Involuntary Termination.  Subject to the terms of any applicable written employment agreement between Company and the Executive (which Executive acknowledges no other such agreement exists as of the date hereof), either the Executive or Company may terminate the Executive’s employment at any time for any reason, with or without notice.  The term of this Agreement shall be the period from the date set forth above until February 28, 2013 and shall automatically be renewed for one-year periods thereafter unless written notice of non-renewal is provided by either party hereto no less than thirty (30) days prior to the date this Agreement would otherwise renew and this Agreement shall be effective immediately upon exchange of copies (including by facsimile) signed by both parties.

 

2.                                       COMPENSATION AND TERMINATION GENERALLY

 

2.1                                 Compensation.  The Executive’s starting base salary shall be $260,000 per annum, but shall be subject to increase in accordance with Executive’s offer letter and to periodic review and modification by the Company’s Remuneration Committee at such time or times as it shall determine.  The Company’s Remuneration Committee shall also from time to time, in its discretion, determine the type and amount of other forms of compensation for Executive’s service with the Company (including, without limitation, stock options or other forms of equity awards).

 

2.2                                 Termination of Employment Generally.  In the event the Executive’s employment with the Company terminates, the Executive shall be entitled to the benefits described in this Section 2.2.

 

2.2.1                        Accrued Salary and Vacation.  All salary and accrued vacation earned through the Termination Date shall be paid to Executive on such date.

 

 

2.2.2                        Accrued Bonus Payment.  The Executive shall receive a lump sum payment of any actual bonus amount to the extent that all the conditions for payment of such bonus have been satisfied and any such bonus was earned and is unpaid on the Termination Date.

 

2.2.3                        Expense Reimbursement.  Within ten (10) days following submission to the Company of proper expense reports by the Executive, the Company shall reimburse the Executive for all expenses incurred by the Executive, consistent with the Company’s expense reimbursement policy in effect prior to the incurring of each such expense, in connection with the business of the Company prior to the Termination Date.

 

3.                                       TERMINATION UPON CHANGE OF CONTROL

 

3.1                                 Severance Payment.  In the event of the Executive’s Termination Upon Change of Control, the Executive shall be entitled to receive an amount equal to eighteen (18) months of the Executive’s Base Salary which shall be paid according to the following schedule: (i) a lump sum payment equal to one-half of such amount shall be payable within ten (10) days following the Termination Date, and (ii) one-third of the balance of such amount shall be payable within ten (10) days of each of the three-month, six-month and nine-month anniversaries of the Termination Date (and in each case no interest shall accrue on such amount); provided, however, that if Section 409A of the Code would otherwise apply to such cash severance payment, it instead shall be paid at such time as permitted by Section 409A of the Code.  In addition to the foregoing severance payment, in the event of the Executive’s Termination Upon Change of Control, the Executive shall be entitled to receive, within ten (10) days following the Termination Upon Change of Control, a lump sum payment equal to one hundred percent (100%) of (a) any actual bonus amount earned with respect to a previous year to the extent that all the conditions for payment of such bonus have been satisfied (excluding any requirement to be in employment with the Company as of a given date which is after the Termination Date) and any such bonus was earned but is unpaid on the Termination Date; and (b) the target bonus then in effect for the Executive for the year in which such termination occurs, such payment to be prorated to reflect the full number of months the Executive remained in the employ of the Company; provided, however, that if Section 409A of the Code would otherwise apply to such cash payment, it instead shall be paid at such time as permitted by Section 409A of the Code.  To illustrate, if the Executive’s target bonus at 100% equals $120,000 for the calendar year and the Executive is terminated on October 15th, then the foregoing payment shall equal $100,000 (i.e., ten (10) months’ prorated bonus at one hundred percent (100%) with October counting as a full month worked).

 

3.2                                 Equity Compensation Acceleration.  Upon the Executive’s Termination Upon Change of Control, the vesting and exercisability of all then outstanding stock options and shares of restricted stock (or any other equity award, including, without limitation, stock appreciation rights and restricted stock units) granted to the Executive under any equity incentive plan or agreement (the “Company Plans”) shall be accelerated as to 100% of the shares subject to any such equity awards granted to the Executive.  In addition, the Exercise Period, as defined in the Company Plans for the purposes of the Executive’s stock options granted under the Company Plans shall be extended so as to expire on the shorter of (i) three (3) years, or (2) the remaining term applicable to such stock option, both (i) and (ii) as measured from the date of Termination Upon Change of Control.

 

3.3                                 COBRA.  If the Executive timely elects coverage under the Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall continue to provide to the Executive, at the Company’s expense, the Company’s health-related employee insurance coverage as in effect immediately prior to the Executive’s Termination Upon Change of Control for a period of twelve (12) months following such Termination Upon Change of Control.  The date of the “qualifying event” for the Executive and any dependents shall be the Termination Date.

 

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3.4                                 Indemnification.  In the event of the Executive’s Termination Upon Change of Control, (a) the Company shall continue to indemnify the Executive against all claims related to actions arising prior to the termination of the Executive’s employment to the fullest extent permitted by law, and (b) if the Executive was covered by the Company’s directors’ and officers’ insurance policy, or an equivalent thereto, (the “D&O Insurance Policy”) immediately prior to the Change of Control, the Company or its Successor shall continue to provide coverage under a D&O Insurance Policy for not less than twenty-four (24) months following the Executive’s Termination Upon Change of Control on substantially the same terms of the D&O Insurance Policy in effect immediately prior to the Change of Control.

 

3.5                                 Additional Equity Grant.  As provided for in the offer letter between Executive and the Company, Executive is entitled to an equity grant on both the first (the “First Anniversary Grant”) and the second (the “Second Anniversary Grant”) anniversary of employment with the Company.  In the event a Change of Control occurs prior to either the First Anniversary Grant or the Second Anniversary Grant, to the extent either or both equity grants have not been made by the Company to Executive at such time, then prior to the consummation of the Change of Control, the Company will grant to Executive the First Anniversary Grant and the Second Anniversary Grant, to the extent previously not granted, and, at Executive’s discretion, such equity grant(s) will either be in the form of a stock option, or a restricted stock grant (or combination thereof).  In the event the equity to be granted includes restricted stock, the number of shares of Company stock subject to such grant (which shall be in lieu of stock options) shall be calculated using a Black-Scholes valuation, using the same methodology and basis of calculation as used by the Company for the most recent published financial statements, in which such a Black-Scholes valuation appears.  The First Anniversary Grant and the Second Anniversary Grant will be entitled to vesting acceleration as provided for in Section 3.2 above, and, the extent to which the First Anniversary Grant and the Second Anniversary Grant are stock options, the post-term exercisability period applicable to such options shall be extended as set forth in Section 3.2 above.

 

4.                                       INVOLUNTARY TERMINATION

 

4.1                                 Severance Payment.  In the event of the Executive’s Involuntary Termination, the Executive shall be entitled to receive an amount equal to twelve (12) months of the Executive’s Base Salary which shall be paid according to the following schedule: (i) a lump sum payment equal to one-fourth of such amount shall be payable within ten (10) days following the Termination Date, and (ii) one-fourth of such amount shall be payable within ten (10) days of each of the three-month, six-month and nine-month anniversaries of the Termination Date (and in each case no interest shall accrue on such amount); provided, however, that if Section 409A of the Code would otherwise apply to such cash severance payment, it instead shall be paid at such time as permitted by Section 409A of the Code.  In addition to the foregoing severance payment, in the event of the Executive’s Involuntary Termination, the Executive shall be entitled to receive, within ten (10) days following the Executive’s Involuntary Termination, a lump sum payment equal to one hundred percent (100%) of (a) any actual bonus amount earned with respect to a previous year to the extent that all the conditions for payment of such bonus have been satisfied (excluding any requirement to be in employment with the Company as of a given date which is after the Termination Date) and any such bonus was earned but is unpaid on the Termination Date; and (b) the target bonus then in effect for the Executive for the year in which such termination occurs, such payment to be prorated to reflect the full number of months the Executive remained in the employ of the Company; provided, however, that if Section 409A of the Code would otherwise apply to such cash payment, it instead shall be paid at such time as permitted by Section 409A of the Code.  To illustrate, if the Executive’s target bonus at 100% equals $120,000 for the calendar year and the Executive is terminated on October 15th, then the foregoing payment shall equal $100,000 (i.e., ten (10) months’ prorated bonus at one hundred percent (100%) with October counting as a full month worked).

 

4.2                                 Equity Compensation Acceleration.  Upon the Executive’s Involuntary Termination, at any time more than six (6) months after the date of commencement of Executive’s employment with the

 

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Company, the vesting and exercisability of all then outstanding stock options and shares of restricted stock (or any other equity award, including, without limitation, stock appreciation rights and restricted stock units) granted to the Executive under any equity incentive plan or agreement (the “Company Plans”) shall be accelerated as to 100% of the shares subject to any such equity awards granted to the Executive.  In addition, the Exercise Period, as defined in the Company Plans for the purposes of the Executive’s stock options granted under the Company Plans shall be extended so as to expire on the shorter of (i) three (3) years, or (2) the remaining term applicable to such stock option, both (i) and (ii) as measured from the date of Termination Upon Change of Control.

 

4.3                                 COBRA.  If the Executive timely elects coverage under the Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall continue to provide to the Executive, at the Company’s expense, the Company’s health-related employee insurance coverage as in effect immediately prior to the Executive’s Involuntary Termination for a period of twelve (12) months following such Involuntary Termination. The date of the “qualifying event” for the Executive and any dependents shall be the Termination Date.

 

4.4                                 Indemnification.  In the event of the Executive’s Involuntary Termination, (a) the Company shall continue to indemnify the Executive against all claims related to actions arising prior to the Termination Date to the fullest extent permitted by law, and (b) if the Executive was covered by the D&O Insurance Policy immediately prior to the Termination Date, the Company shall continue to provide coverage under a D&O Insurance Policy for not less than twenty-four (24) months following the Executive’s Involuntary Termination on substantially the same terms of the D&O Insurance Policy in effect immediately prior to the Termination Date.

 

4.5                                 Additional Equity Grant. In the event that Involuntary Termination occurs more than six (6) months after the date of commencement of Executive’s employment with the Company but prior to either the First Anniversary Grant or the Second Anniversary Grant, to the extent either or both equity grants have not been made by the Company to Executive at such time, then upon the Executive’s Involuntary Termination, the Company will grant to Executive the First Anniversary Grant and the Second Anniversary Grant, to the extent previously not granted.  The First Anniversary Grant and the Second Anniversary Grant will be entitled to vesting acceleration as provided for in Section 4.2 above, and the post-term exercisability period applicable to such options shall be extended as set forth in Section 4.2 above.

 

5.                                       FEDERAL EXCISE TAX UNDER SECTION 280G

 

5.1                                 Excise Tax.  If (a) any amounts payable to the Executive under this Agreement or otherwise are characterized as excess parachute payments pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) the Executive thereby would be subject to any United States federal excise tax due to that characterization, then if Executive would thereby be in a better after-tax position, the Company may elect, in the Company’s sole discretion, to reduce the amounts payable under this Agreement or otherwise, or to have any portion of applicable options or restricted stock not vest or become exercisable, in order to avoid any “excess parachute payment” under Section 280G(b)(1) of the Code.

 

5.2                                 Calculation by Independent Public Accountants.  Unless the Company and the Executive otherwise agree in writing, any calculation  of the amount of any excess parachute payments payable by the Executive shall be made in writing by the Company’s independent public accountants (the “Accountants”) whose conclusion shall be final and binding on the parties.  For purposes of making such calculations, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to

 

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make the required calculations.  The Company shall bear all fees and expenses the Accountants may charge in connection with these services, but the engagement of the Accountants for this purpose shall be pursuant to an agreement between the Executive and the Accountants.

 

6.                                       DEFINITIONS

 

6.1                                 Capitalized Terms Defined.  Capitalized terms used in this Agreement shall have the meanings set forth in this Section 4, unless the context clearly requires a different meaning.

 

6.2                                 “Base Salary” means the greater of (a) if applicable, the monthly salary of the Executive in effect immediately prior to the Change of Control, or (b) the monthly salary of the Executive in effect immediately prior to the Termination Date.

 

6.3                                 “Cause” means:

 

(a)                                  the Executive willfully failed to follow the lawful written directions of the Board of Directors of the Company or Executive’s immediate superior; provided that no termination for such Cause shall occur unless the Executive: (i) has been provided with notice, specifying such willful failure in reasonable detail, of the Company’s intention to terminate the Executive for Cause; and (ii) has failed to cure or correct such willful failure within thirty (30) days of receiving such notice;

 

(b)                                 the Executive engaged in gross misconduct which is materially detrimental to the Company; provided that no termination for such Cause shall occur unless the Executive: (i) has been provided with notice, specifying such gross misconduct in reasonable detail, of the Company’s intention to terminate the Executive for Cause; and (ii) has failed to cure or correct such gross misconduct within thirty (30) days of receiving such notice;

 

(c)                                  the Executive willfully failed to comply in any material respect with the Company’s Confidentiality Non-Disclosure and Invention Assignment Agreement, the Company’s share dealing code, the Company’s Non-Competition Agreement or any other reasonable policies of the Company where non-compliance would be materially detrimental to the Company; provided that no termination for such Cause shall occur unless the Executive: (i) has been provided with notice of the Company’s intention to terminate the Executive for such Cause, and (ii) has failed to cure or correct such willful failure within thirty (30) days of receiving such notice, provided that such notice and cure period requirements shall not apply in the event that such non-compliance is of a nature that it is unable to be remedied; or

 

(d)                                 is convicted of a felony or crime involving moral turpitude (excluding drunk driving unless combined with other aggravating circumstances or offenses) or commission of a fraud which the Company reasonably believes would reflect adversely on the Company.

 

6.4                                 “Change of Control” means:

 

(a)                                  any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange

 

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Act), directly or indirectly, of securities of the Company representing fifty (50%) percent or more of (i) the outstanding shares of common stock of the Company, or (ii) the combined voting power of the Company’s outstanding securities;

 

(b)                                 the Company is party to a merger or consolidation, or series of related transactions, which results in the voting securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), directly or indirectly, at least fifty (50%) percent of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

 

(c)                                  the sale or disposition of all or substantially all of the Company’s assets, or consummation of any transaction, or series of related transactions, having similar effect (other than to a subsidiary of the Company);

 

(d)                                 a change in the composition of the Board within any consecutive two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors who either (i) were directors of the Company as of the effective date of this Agreement, or (ii) are elected, or nominated for election, to the Board with the affirmative votes of a least a majority of those directors whose election or nomination was not in connection with an actual or threatened proxy contest related to the election of directors to the Company; or

 

(e)                                  the dissolution or liquidation of the Company.

 

6.5                                 “Company” shall mean Planet Payment, Inc. and, following a Change of Control, any Successor.

 

6.6                                 “Involuntary Termination” means:

 

(a)                                  any termination without Cause of the employment of the Executive by the Company; or

 

(b)                                 any resignation by Executive for Good Reason where such resignation occurs within sixty (60) days following the occurrence of such Good Reason.

 

Notwithstanding the foregoing, the term “Involuntary Termination” shall not include any termination of the employment of the Executive: (1) by the Company for Cause; (2) by the Company as a result of the Permanent Disability of the Executive; (3) as a result of the death of the Executive; (4) that occurs within the period of time to qualify as a “Termination Upon Change of Control”; or (5) as a result of the voluntary termination of employment by the Executive for any reason other than Good Reason.

 

6.7                                 “Good Reason” means the occurrence of any of the following conditions, without the Executive’s written consent:

 

(a)                                  The Company requiring the Executive to relocate to any office or location more than 50 miles (one-way) from the Executive’s primary office at the time this Agreement is made.

 

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(b)                                 Any act, set of facts or omissions with respect to the Executive that would, as a matter of applicable law, constitute a constructive termination of the Executive.

 

(c)                                  The assignment to the Executive of a title, position, responsibilities or duties that is not a “Substantive Functional Equivalent” to the title, position, responsibilities or duties which the Executive had immediately prior to such assignment (including, as relevant, immediately prior to the public announcement of the Change of Control).

 

(d)                                 A reduction in the Executive’s Base Salary or, if applicable, target bonus opportunity (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned similar to the applicable performance requirements currently in effect), and in the event of a Change of Control, as compared to Executive’s Base Salary and target bonus opportunity in effect immediately prior to the public announcement of the Change of Control; provided, however, that this clause (d) shall not apply in the event of a reduction in the Executive’s Base Salary or, if applicable, target bonus opportunity as part of a Company-wide or executive team-wide cost-cutting measure or Company-wide or executive team-wide cutback as a result of overall Company performance.

 

(e)                                  The failure of the Company (i) to continue to provide the Executive an opportunity to participate in any benefit or compensation plans provided to employees who hold positions with the Company (or, in the event of a Change of Control, its Successor) comparable to the Executive’s position, (ii) to provide the Executive all other fringe benefits (or the equivalent) in effect for the benefit of any employee group which includes any employee who hold a position with the Company (or, in the event of a Change of Control, its Successor) comparable to the Executive’s position, where in the event of a Change of Control, such comparison shall be made relative to the time immediately prior to the public announcement of such Change of Control); or (iii) continue to provide director’s and officers’ insurance.

 

(f)                                    A material breach of this Agreement by the Company, including, in the event of a Change of Control, failure of the Company to obtain the consent of a Successor to perform all of the obligations of the Company under this Agreement.

 

The Executive must first give the Company an opportunity to cure any of the foregoing within thirty (30) days following delivery to the Company of a written explanation specifying the specific basis for Executive’s belief that Executive is entitled to terminate employment for Good Reason, and Executive terminates employment with the Company not later than (30) days following the Company’s failure to cure.

 

6.8                                 “Permanent Disability” means that:

 

(a)                                  the Executive has been incapacitated by bodily injury, illness or disease so as to be prevented thereby from engaging in the performance of the Executive’s duties;

 

(b)                                 such total incapacity shall have continued for a period of six consecutive months; and

 

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(c)                                  such incapacity will, in the opinion of a qualified physician, be permanent and continuous during the remainder of the Executive’s life.

 

6.9                                 “Substantive Functional Equivalent” means that the Executive’s position must:

 

(a)                                  be in a substantive area of the Executive’s competence (e.g., finance or executive management) and not materially different from the position occupied immediately prior;

 

(b)                                 allow the Executive to serve in a role and perform duties functionally equivalent to those performed immediately prior; and

 

(c)                                  not otherwise constitute a material, adverse change in authority, title, status, responsibilities or duties from those of the Executive immediately prior, causing the Executive to be of materially lesser rank or responsibility, including requiring the executive to report to a person other than the CEO or the Board.

 

6.10                           “Successor” means any successor in interest to, or assignee of, substantially all of the business and/or assets of the Company.

 

6.11                           “Termination Date” means the date of the termination of the Executive’s employment with the Company.

 

6.12                           “Termination Upon Change of Control” means:

 

(a)                                  any termination of the employment of the Executive by the Company without Cause during the period commencing on or after the date that the Company first publicly announces a definitive agreement that results in a Change of Control (even though still subject to approval by the Company’s stockholders and other conditions and contingencies, but provided that the Change of Control actually occurs) and ending on the date which is twelve (12) months following the Change of Control; or

 

(b)                                 any resignation by Executive for Good Reason where (i) such Good Reason occurs during the period commencing on or after the date that the Company first publicly announces a definitive agreement that results in a Change of Control (even though still subject to approval by the Company’s stockholders and other conditions and contingencies, but provided that the Change of Control actually occurs) and ending on the date which is twelve (12) months following the Change of Control, and (ii) such resignation occurs at or after such Change in Control and in any event within six (6) months following the occurrence of such Good Reason.

 

Notwithstanding the foregoing, the term “Termination Upon Change of Control” shall not include any termination of the employment of the Executive: (1) by the Company for Cause; (2) by the Company as a result of the Permanent Disability of the Executive; (3) as a result of the death of the Executive; or (4) as a result of the voluntary termination of employment by the Executive for any reason other than Good Reason.

 

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7.                                       EXCLUSIVE REMEDY

 

7.1                                 No Other Benefits Payable.  The Executive shall be entitled to no other termination, severance or change of control compensation, benefits, or other payments from the Company as a result of any Termination Upon a Change of Control with respect to which the payments and/or benefits described in Section 2 have been provided to the Executive, except as expressly set forth in this Agreement.

 

7.2                                 No Limitation of Regular Benefit Plans.  Except as may be provided  elsewhere in this Agreement, this Agreement is not intended to and shall not affect, limit or terminate any plans, programs or arrangements of the Company that are regularly made available to a significant number of employees or officers of the Company, including, without limitation, the Company’s stock option plans.

 

7.3                                 Release of Claims.  The payment of the benefits described in Sections 3 and 4 of this Agreement is conditioned upon the delivery by the Executive to the Company of a signed and effective general release of claims as provided by the Company; provided, however, that the Executive shall not be required to release any rights the Executive may have to be indemnified by the Company or otherwise provided under this Agreement.

 

7.4                                 Noncumulation of Benefits.  The Executive may not cumulate cash severance payments, stock option vesting and exercisability and restricted stock vesting under this Agreement, any other written agreement with the Company and/or another plan or policy of the Company.  If the Executive has any other binding written agreement with the Company which provides that, upon a Change of Control or Termination Upon a Change of Control or Involuntary Termination, the Executive shall receive termination, severance or similar benefits, then no benefits shall be received by Executive under this Agreement unless, prior to payment or receipt of benefits under this Agreement, the Executive waives Executive’s rights to all such other benefits, in which case this Agreement shall supersede any such written agreement with respect to such other benefits.

 

8.                                       NON-COMPETE; PROPRIETARY AND CONFIDENTIAL INFORMATION

 

During the term of this Agreement and following any termination of employment, Executive agrees to continue to abide by the terms and conditions of each of the Non-Competition Agreement (during the term of such Agreement) and the Confidentiality, Non-Disclosure and Invention Assignment Agreement between the Executive and the Company.

 

9.                                       NON-SOLICITATION

 

For a period of twelve (12) months after termination of the Executive’s employment for Cause, the Executive will not solicit (other than through advertisements directed to the general public) the services or business of any employee or consultant of the Company, which, if accepted, would result in the discontinuance of that person’s or entity’s relationship with or to the Company without the written consent of the Company.

 

10.                                 ARBITRATION

 

10.1                           Disputes Subject to Arbitration.  Any claim, dispute or controversy arising out of this Agreement (other than claims relating to misuse or misappropriation of the intellectual property of the Company), the interpretation, validity or enforceability of this Agreement or the alleged breach thereof shall be submitted by the parties to binding arbitration by a sole arbitrator under the rules of the American Arbitration Association; provided, however, that (a) the arbitrator shall have no authority to make any ruling or judgment that would confer any rights with respect to the trade secrets, confidential and

 

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proprietary information or other intellectual property of the Company upon the Executive or any third party; and (b) this arbitration provision shall not preclude the Company from seeking legal and equitable relief from any court having jurisdiction with respect to any disputes or claims relating to or arising out of the misuse or misappropriation of the Company’s intellectual property.  Judgment may be entered on the award of the arbitrator in any court having jurisdiction.

 

10.2                           Costs of Arbitration.  All costs of arbitration, including reasonable attorney’s fees of the Executive, will be borne by the Company, except that if the Executive initiates arbitration and the arbitrator finds the Executive’s claims to be frivolous the Executive shall be responsible for his own costs and attorneys fees.

 

10.3                           Site of Arbitration.  The site of the arbitration proceeding shall be in New York City, New York.

 

11.                                 NOTICES

 

For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or five (5) business days after being mailed, return receipt requested, as follows: (a) if to the Company, attention: Chief Executive Officer, at the Company’s offices at 670 Long Beach Boulevard, Long Beach, NY 11561 and, (b) if to the Executive, at the address indicated below or such other address specified by the Executive in writing to the Company.  Either party may provide the other with notices of change of address, which shall be effective upon receipt.

 

12.                                 MISCELLANEOUS PROVISIONS

 

12.1                           Heirs and Representatives of the Executive; Successors and Assigns of the Company.  This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devises and legatees.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and assigns of the Company.

 

12.2                           Amendment and Waiver.  No provision of this Agreement shall be modified, amended, waived or discharged unless the modification, amendment, waiver or discharge is agreed to in writing, specifying such modification, amendment, waiver or discharge, and signed by the Executive and by an authorized officer of the Company (other than the Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

12.3                           Withholding Taxes.  All payments made under this Agreement shall be subject to reduction to reflect all federal, state, local and other taxes required to be withheld by applicable law.

 

12.4                           Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

 

12.5                           Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York, without regard to where the Executive has his residence or principal office or where he performs his duties hereunder.

 

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12.6                           No Duty to Mitigate.  The Executive is not required to seek alternative employment following termination, and payments called for under this Agreement will not be reduced by earnings from any other source.

 

12.7.                        Section 409A of the Code.  To the extent (a) any payments or benefits to which Employee becomes entitled under this Agreement, or under any agreement or plan referenced herein, in connection with Employee’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code and (b) Employee is deemed at the time of such termination of employment to be a “specified employee” under Section 409A of the Code, then such payments shall not be made or commence until the earliest of (i) the expiration of the six (6)-month period measured from the date of Employee’s “separation from service” (as such term is at the time defined in Treasury Regulations under Section 409A of the Code) from the Company; or (ii) the date of Employee’s death following such separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Employee, including (without limitation) the additional twenty percent (20%) tax for which Employee would otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of such deferral.  Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to Employee or Employee’s beneficiary in one lump sum (without interest).  Any termination of Employee’s employment is intended to constitute a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1.  It is intended that each installment of the payments provided hereunder constitute separate “payments” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).  It is further intended that payments hereunder satisfy, to the greatest extent possible, the exemption from the application of Code Section 409A (and any state law of similar effect) provided under Treasury Regulation Section 1.409A-1(b)(4) (as a “short-term deferral”).

 

12.8                           Entire Agreement.  This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein (whether oral or written and whether express or implied).

 

[SIGNATURE PAGE TO EXECUTIVE RETENTION AGREEMENT FOLLOWS]

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company, by its duly authorized officer, as of the day and year first above written.

 

	
 
    	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Robert J. Cox
    
	
 
    	
 
    	
Robert   J. Cox
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:   141 Murray Avenue
    
	
 
    	
 
    	
Larchmont,   NY 10538
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
PLANET   PAYMENT, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Philip D. Beck
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Its:
    	
CEO
    

 

[SIGNATURE PAGE TO EXECUTIVE RETENTION AGREEMENT]Exhibit 10.12

 

DATED August 15, 2005

 

 

BDP REALTY ASSOCIATES, LLC

 

AND

 

PLANET GROUP, INC.

 

 

AGREEMENT OF LEASE

 

 

670 Long Beach Boulevard
 Long Beach, New York 11561

 

 

AGREEMENT OF LEASE made as of the 15th day of August 2005 between BDP REALTY ASSOCIATES, LLC with an address at 670 Long Beach Blvd., Long Beach, New York 11561 (hereinafter referred to as the “Landlord”) and PLANET GROUP, INC. with an address at 670 Long Beach Blvd., Long Beach, New York 11561 (hereinafter referred to as the “Tenant”).

 

W I T N E S S E S:

 

1.                                       Premises.

 

1.1                                 The Landlord hereby leases and demises to the Tenant, and the Tenant hereby takes and hires from the Landlord, upon and subject to the terms, conditions, covenants and provisions hereof, all that building and adjacent land known as and located at 670 Long Beach Blvd., Long Beach, New York 11561 and comprising Section 59, Block 119, Lots 11-14, 35 and 37 in the Town of Long Beach, County of Nassau, as delineated in red for purposes of identification only on Schedule A annexed hereto and made a part hereof (the “Premises”).

 

2.                                       Term and Option to Renew.

 

2.1                                 The term of this Lease shall commence on the 15th day of August 2005 and end on the 31st day of December 2016 (the “Term”).

 

2.2                                 Landlord hereby grants to Tenant the right to renew the Term of this Lease for one five (5) year period (“Extension Term”) from the expiration of the initial term hereof upon the terms and conditions set forth in this lease (except for rent which shall be as set forth in this paragraph) by service of a written notice from Tenant to Landlord not less than one hundred and eighty (180) days prior to the expiration of the initial term hereof.  The rent for the Extension Term shall be the greater of Tenant’s rent at the end of the initial term plus 3%, or 95% of the premises fair market rental value as determined by a New York State licensed commercial real estate appraiser selected by the Landlord.  The costs of the appraisal shall be paid equally by the Tenant and Landlord.

 

3.                                       Rent and Additional Rent.

 

3.1                                 The Premises consist of 16,284 square feet of rental office space that Tenant has agreed to rent at the annual rate of $21.70 per square foot.  Therefore, the Tenant covenants and agrees to pay the Landlord, in lawful money of the United States, without offset or deduction (subject as mentioned below) and without prior demand, rent in the amount of Three Hundred Fifty Three Thousand Three Hundred Sixty Five ($353,365.00) Dollars per annum (the “Rent”) payable in advance in equal monthly installments of Twenty Nine Thousand Four Hundred Forty Seven Dollars and 00/100 ($29,447.00) Dollars on the first day of each and every month during the Term; together with all such additional payments and charges as may be due hereunder (“Additional Rent”), at the office of the Landlord or such other place as Landlord shall designate.  The Rent shall be increased by 3% on the 1st day of January in each year during the Term, commencing January 1, 2007.

 

3.2                                 It is expressly understood and agreed between the parties that the Rent shall not include the supply of electricity, gas, water, sewage, heat and air conditioning, cleaning

 

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service or any other services, which it shall be the sole responsibility of the Tenant to arrange and pay for to the extent it requires same or such charges are levied or incurred in respect of the Premises.  Landlord shall not be liable for any failure, interruption or suspension of any such service, except to the extent that the same is caused by the gross negligence, or willful act of Landlord or its employees and agents.

 

3.3                                 In addition to Rent, Tenant shall:

 

3.3.1                        pay all real estate and school district taxes levied in respect of the Premises (collectively “Taxes”) for all periods occurring during the Term of this Lease and Landlord shall deliver to Tenant a copy of each Tax assessment received, promptly upon receipt of same.  At Landlord’s option, payment of Taxes shall be made to Landlord monthly together with the payment of Rent, based on an estimate of the annual taxes due for the relevant fiscal year, with an appropriate adjustment (and consequent credit or additional payment as the case may be), once the amount” of taxes for the relevant period has been determined.  In the event that Landlord requires Tenant to pay the Taxes direct to the relevant taxing authority, then Tenant shall from time to time be required to deliver to Landlord upon demand receipts for payment of Taxes and Tenant shall indemnify and hold Landlord harmless from and against all interest and penalties which may arise as a result of late payment of any Taxes.  Landlord shall at the request and cost of Tenant assist Tenant and participate in any certiorari proceedings, which Tenant may desire to commence in order to reduce the amount of Taxes payable.  Any refund of Taxes received by Landlord at any time relating to any period during the Term shall be immediately repaid to Tenant or credited to Tenant’s Real Estate Taxes Account.

 

3.3.2                        Insure the Premises against all risks usually insured against for premises similar to the Premises and including third party liability, with an insurer of good standing in the State of New York.  The amounts of such insurances shall be for such amounts as the Landlord shall reasonably require.  Tenant shall secure that Landlord and any lending institution(s) designated by landlord are included as an additional named insureds and loss payees under all such policies of insurance.  Tenant shall deliver to Landlord not less than once in each year during the Term a Certificate of Insurance confirming that such insurance is in full force and effect and that Landlord’s and its lending institution(s) interests are duly noted.

 

3.4                                 In the event that Tenant fails to pay when due any item required to be paid by it hereunder pursuant to this section 3, Landlord shall be entitled to pay same on behalf of Tenant and to recover same from Tenant upon demand as additional rent.

 

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3.5                                 Notwithstanding anything herein to the contrary, the due date for any and all monetary obligations which are not payable on a regular monthly basis shall be thirty (30) days after Tenant has received a written demand therefor from Landlord.

 

3.6                                 All references in this Lease to the payment by Tenant of costs, expenses, fees, amounts and sums, etc. are deemed to refer to reasonable costs, expenses, fees, amounts and sums, etc.  All references in this Lease to Landlord’s satisfaction or judgment or discretion are deemed to refer to Landlord’s reasonable satisfaction or judgment or discretion.

 

4.                                       Use of Premises.

 

4.1                                 Tenant covenants and agrees that the sole permitted use of the Premises shall be as and for offices and uses ancillary thereto.

 

5.                                       Signage.

 

5.1                                 Tenant shall be entitled to display its name and logo on or about the exterior of the Premises, in a manner consistent with the character of the building and shall be entitled to permit its tenants to similarly display their respective name and signage in a similar fashion, subject to landlord’s approval and compliance with all local regulations and zoning ordinances.

 

6.                                       Restriction On Assignment and Subletting.

 

6.1                                 Tenant shall not assign this Lease nor sublet nor share occupancy or possession of all or any part of the Premises, without the prior consent of Landlord, which shall not be unreasonably withheld or delayed.  Any such assignment or sublease without consent shall be void and of no force and effect.  PROVIDED ALWAYS that nothing herein shall prevent or restrict Tenant from assigning, subletting or sharing occupation of the whole or any part of the Premises with any entity which is a subsidiary or affiliate of the Tenant, or which is owned or controlled by Stockholders of Tenant and Landlord’s consent shall not be required to any such assignment or Subletting.  Tenant shall give notice to Landlord upon any such permitted assignment or subletting of more than one half of the Premises.

 

6.2                                 If Landlord’s consent is required hereunder, Tenant shall submit to Landlord details of the proposed assignee or sub-tenant, including relevant financial information or references and the terms of the proposed transaction.  If Landlord does not object to the proposed transaction within 30 days of receipt of Tenant’s application for consent; landlord shall be deemed to have consented to same.  Tenant shall be responsible for all reasonable costs and expenses of Landlord incurred in considering and granting any such consent.

 

7.                                       Condition of Premises and Representations.

 

7.1                                 Tenant has examined the Premises and is familiar with the physical condition thereof.  Landlord has not made and does not make any representation as to the physical condition, expenses, operation or any other matter or thing affecting or related to the Premises, except as herein specifically set forth, and the Tenant hereby expressly acknowledges that no representations have been made.  Tenant further acknowledges that it has inspected the

 

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Premises and the Premises and agrees to take the Premises “as is” and Landlord has no obligation to undertake any works to or on the Premises.

 

8.                                       Repairs by Tenant and Access By Landlord.

 

8.1                                 Tenant covenants that throughout the Term of this Lease it shall, at its own cost and expense keep and maintain, or cause to be kept and maintained, in good condition and repair subject to normal wear and tear, the interior and exterior of the Premises the HVAC, electrical and plumbing systems in the Premises and any items of plant, equipment and personal property therein provided by Landlord.  Nothing herein shall require Tenant to put the Premises into any better condition or state of repair than shall exist as of August 1 2005.  Notwithstanding the foregoing, Tenant shall not be obligated to replace or pay for the replacement of any sprinkler systems serving the Premises nor the roof, foundations or exterior walls of the Premises either during or at the end of the Term of this Lease, unless (i) such replacement shall be necessitated by Tenant’s wrongful or negligent act or omission and (ii) the cost of such replacement shall not be covered by Landlord’s insurance.

 

8.2                                 Tenant shall not commit nor suffer waste or injury to the Premises and shall keep or cause to be kept the Premises and all portions thereof in a neat and clean condition and free from all accumulated debris, rubbish, and other obstructions.

 

8.3                                 Landlord shall have the right, for itself and for its mortgagee, upon reasonable notice to Tenant (except in case of emergency) to enter upon the Premises for the purpose of inspecting and examining same, for the purpose of carrying out any works required in relation to the Premises and during the last six (6) months of the term, for the purpose of showing the Premises to prospective tenants.

 

8.4                                 In the event that Tenant fails to comply with the provisions of this Section after ten (10) days notice, then Landlord may, at Landlord’s option, enter upon the Premises and carry out Tenant’s obligations hereunder the cost of which shall be borne by Tenant and paid to Landlord as Additional Rent when billed by Landlord.

 

9.                                       Alterations.

 

9.1                                 Tenant shall make no alterations, changes or improvements of a structural nature to the Premises, or any changes or improvements to the main electrical, heating and air conditioning, water and sewage systems at the Premises or any part thereof, without Landlord’s prior written consent which shall not be unreasonably withheld or delayed.

 

9.2                                 If Landlord’s consent is required hereunder, Tenant shall submitted Landlord details of the proposed works, including relevant plans.  Tenant shall be responsible for all reasonable costs and expenses of Landlord incurred in considering and granting any such consent.

 

10.                                 Mechanics Liens.

 

10.1                           If any mechanic’s lien, or liens, shall be filed against Tenant’s interest in the Premises for work done, or materials furnished to the Tenant, Tenant shall, within twenty

 

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(20) days thereafter, at his own expense, cause such lien, or liens, to be discharged by filing a bond for that purpose as required by law, or satisfying the indebtedness by payment.

 

11.                                 Subordination; Compliance with Mortgage.

 

11.1                           This Lease is subject and subordinate in all respects to any and all ground leases or mortgages which may now or hereafter encumber the Premises.  Landlord represents that this lease does not constitute a violation of any such mortgage.

 

12.                                 Additional Rent and Late Charge.

 

12.1 In the event of non-payment of any Additional Rent due hereunder, the Landlord shall have all rights and remedies herein provided in the case of the non-payment of Rent.  If the Landlord fails to receive from the Tenant any payment (or portion thereof) due hereunder by its due date, and if such failure is not fully remedied within twenty one (21) days after notice, Tenant shall pay to Landlord as Additional Rent hereunder, a late charge (the “Late Charge”) at the rate of one (1%) percent of the overdue amount for each month or any part thereof, or if lower, the maximum permissible legal rate, until said overdue amount is paid.  All Late Charges shall be payable by the Tenant, as soon as they accrue.

 

13.                                 Indemnity.

 

13.1                           Tenant shall indemnify and hold harmless the Landlord from and against all costs, claims, actions, damages and liability (including reasonable attorneys fees, costs and expenses), arising from, out of, or in any way relating to the use or occupancy by Tenant of the Premises, including but not limited to the negligent or willful act or omission of Tenant or any of Tenant’s employees, agents, contractors or invitees; provided always that Tenant shall not be liable hereunder to the extent that any claim results from the negligent or willful act of Landlord or Landlord’s employees, agents or other tenants.

 

14.                                 Condemnation.

 

14.1                           If at any time during the Term of this Lease, the whole of the Premises shall be taken for any public or quasi-public purpose by any lawful power or authority by the exercise of the right of condemnation or eminent domain, this Lease and the Term hereby granted shall terminate on the date that the Premises shall be taken and Tenant shall have no claim for the value of any unexpired Term.

 

14.2                           If only a part of the Premises shall be taken or condemned as aforesaid, this Lease shall terminate only in respect of the part so taken, as of the date of such taking except that (a) Tenant may elect to terminate this Lease if that portion of the building constructed on the Premises then occupied by Tenant shall be reduced by more than 15%, and (b) Landlord may elect to terminate this Lease if that portion of the building constructed on the Premises then occupied by Tenant shall be reduced by more than 20%; either election, whether that permitted to be made hereunder by Tenant or that permitted to be made hereunder by Landlord, as aforesaid shall by notice of such election by the one party to the other party, given no later than thirty (30) days after (i) notice of such taking is given by the condemning or other authority, or (ii) the date of such taking, whichever occurs later.  If more than fifty percent (50%) of the

 

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Premises shall be so taken, then in that event either party may, by notice of its election given to the other, as aforesaid, terminate this Lease.

 

14.3                           If, as a result of any such taking or conveyance of parking facilities, the number of parking spaces available for the Tenant shall be permanently reduced below ten (10) then Tenant shall have the right to terminate this Lease by giving written notice to Landlord within thirty (30) days after the date of such taking or conveyance.

 

14.4                           Tenant shall in no event have any claim or interest in or to any award of damages received by Landlord for such taking.  Tenant shall nonetheless, be entitled to claim, prove and receive in any such condemnation proceedings such award or compensation as maybe allowed for its relocation costs, trade fixtures and other equipment and for loss of business, goodwill, depreciation or injury to and cost of removal of trade fixtures, etc. but only if such award or compensation shall be made by the condemning or other such authority in addition to, and shall not result in a reduction of the award or compensation made by it to Landlord.

 

15.                                 Destruction, Fire or Other Casualty.

 

15.1                           If at any time during the Term of this Lease, the whole or any part of the Premises shall be damaged by fire or other casualty, Tenant shall give immediate notice to Landlord and this Lease shall continue in full force and effect except as hereinafter set forth in this Section 15.

 

15.2                           If the Premises is damaged or rendered unusable by fire or other casualty, whether in whole or in part, the damage to the Premises shall be repaired by or on behalf of Landlord out of proceeds of insurance receivable by the Landlord, at no cost to Tenant and the Rent shall be apportioned from the day following the casualty until such repair shall be substantially completed, according to the part of the Premises which is usable, subject to Landlord’s right to elect not to restore the same as hereinafter provided.

 

15.3                           If the Premises is rendered wholly unusable or (whether or not the Premises is damaged·in whole or in part) if the Premises shall be so damaged that Landlord shall decide to demolish it or to rebuild same, or if any damage to the Premises occurs during the last six (6) months of the Term then, in any of such events, Landlord or Tenant may elect to terminate this Lease by written notice to Tenant or Landlord, as the case may be, given within ninety (90) days after such fire or casualty, specifying a date for the expiration of the Lease, which date shall not be more than fifteen (15) days after the giving of such notice, and upon the date specified in such notice the Term of this Lease shall expire as fully and completely as if such date were the date set forth above for the termination of this Lease and Tenant shall forthwith quit, surrender and vacate the Premises, without prejudice however to Landlord’s rights and remedies against Tenant under the Lease provisions in effect prior to such termination and any Rent owing shall be paid up to such date, and any payments of Rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant.

 

15.4                           Unless the Lease shall be terminated as provided for herein, Landlord shall make the repairs and restorations required hereunder, with all reasonable expedition, subject to delays due to adjustment of insurance claims, labor troubles and causes beyond Landlord’s

 

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control.  After any such casualty, Tenant shall cooperate with Landlord’s restoration by removing from the Premises as promptly as reasonably possible, all of Tenant’s movable equipment, furniture and other property.  Tenant’s liability for Rent shall resume five (5) days after written notice from Landlord that the Premises is substantially ready for Tenant’s occupancy.

 

15.5                           Nothing contained hereinabove shall relieve Tenant from liability that may exist as a result of damage from fire or other casualty caused by the Tenant or Tenant’s agents or employees which is not covered by insurance.

 

15.6                           Tenant acknowledges that it will carry its own insurance on Tenant’s files, furniture and/or furnishings or any fixtures, equipment, improvements or other property removable by Tenant and agrees that Landlord will not be liable or obligated to repair any damage thereto or replace same.

 

16.                                 Quiet Enjoyment.

 

16.1                           The Tenant, upon paying the Rent and Additional Rent and all other sums and charges to be paid by it as herein provided, and observing and keeping all covenants, warranties, agreements and conditions of this Lease on its part to be kept, shall quietly have and enjoy the Premises during the term of this Lease, subject to the terms and conditions of this Lease.

 

17.                                 Bankruptcy and Attachment.

 

17.1                           The Tenant agrees that if any execution or attachment should be issued against the Premises (or the estate created hereby) whereupon the Premises should be taken or occupied by someone other than Tenant or if Tenant shall be adjudged a bankrupt or insolvent, or any receiver or trustee shall be appointed for the property of the Tenant and not discharged within thirty (30) days, or if the Tenant shall make any assignment of its property for the benefit of creditors, or if Tenant shall file a voluntary petition in bankruptcy, or apply for reorganization, composition, extension or other arrangement with its creditors under any federal or state law now or hereafter enacted, and any such process, assignment, action or proceeding be not vacated or set aside within thirty (30) days thereafter, then each of the foregoing shall be deemed an Event of Default for the purposes of Section 18.

 

18.                                 Default.

 

18.1                           The following shall be defined and deemed as an “Event of Default”:

 

18.1.1                  Any failure of the Tenant to pay the Rent or Additional Rent or other sum of money when the same shall be due and payable and such failure shall continue for a period of thirty (30) days after Landlord shall have given written notice to Tenant of such failure; or

 

18.1.2                  Any failure to observe and perform any of the covenants, agreements, terms or conditions contained in this Lease other than those referred to in the foregoing subsection 18.1.1 which shall continue for a period of thirty (30) days after Landlord

 

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shall have given written notice to Tenant of such failure provided, however, that if such obligation cannot be performed within said thirty (30) day period, Tenant shall not be deemed in default thereof or deemed to have failed to perform such obligation if and for so long as Tenant has commenced performance (to the extent feasible) of such obligation within said thirty (30) day period and uses diligent efforts to complete performance of same.

 

18.1.3                  The occurrence of an event set forth in Section 17.1 or a default by Tenant of the provisions of Section 6.1.

 

18.2                           Upon the occurrence of any Event of Default Landlord shall, in addition to any other right or remedy provided for in this Lease, have the immediate right of re-entry and may remove the Tenant and Tenant’s property from the Premises by any means permitted by law.  In addition, if any Event of Default shall occur (whether or not the Landlord shall elect to re-enter or to take possession pursuant to legal proceeding or pursuant to any notice provided for by the law) the Landlord shall have the right, at its option, to terminate this Lease on written notice to Tenant and/or it may from time to time, whether or not this Lease be terminated, make such alterations and repairs as may be necessary in order to relet the Premises and/or relet the Premises or any part thereof for such term or terms (which may extend beyond the term) and at such rent(s) and upon such other terms and conditions as Landlord in its sole discretion may deem advisable; upon each such reletting all rents received by the Landlord from such reletting shall be applied first, to the payment of any costs and expenses of such reletting, including brokerage fees and attorneys’ fees; second, to the payment of the Rent and Additional Rent due and unpaid hereunder, and the residue, if any, shall be held by the Landlord and applied in payment of future rent(s) as the same may become due and payable hereunder, with the right reserved to the Landlord to bring such action(s) or proceeding(s) for the recovery of any deficits remaining unpaid without being obliged to await the end of the Term for a final determination of the Tenant’s account, and the commencement or maintenance of an action shall not bar Landlord from bringing other or subsequent actions for further accruals pursuant to the provisions of this Section.  If such rents received from such reletting during any month are less than that to be paid during that month by Tenant hereunder, the Tenant shall pay any such deficiency to Landlord.  Such deficiency shall be calculated and paid monthly subject to Landlord’s right of action(s) or proceeding(s) as aforesaid.  No such re-entry or taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease, unless a written notice of such intention is given to Tenant.  Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach.  Should the Landlord at any time terminate this Lease for any breach, in addition to any other remedies it may have, it may recover from the Tenant all damages it may incur by reason of such breach as damages for loss of the bargain and not as a penalty, including the cost of recovering possession of the Premises and reasonable costs and attorneys’ fees, all of which shall be immediately due and payable from the Tenant to the Landlord.

 

18.3                           In the event of a breach by the Tenant of any of its obligations under this Lease, Landlord shall also have the right (a) to appropriate injunctive relief and (b) to recover Landlord’s reasonable attorneys’ fees, costs and disbursements occasioned by any default.  The remedies provided in this Lease shall be cumulative and the exercise of anyone of them shall not in any way abridge, modify or preclude any other rights or remedies to which the Landlord is entitled either at law or in equity.

 

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19.                                 Security.

 

19.1                           The original Tenant hereunder shall not be required to deposit any security with Landlord.  However, if any assignee is required to deposit such security, the remaining provisions of this Section shall apply.  Tenant has deposited with Landlord the agreed amount, as security for the faithful performance and observance by Tenant of the provisions of this Lease; it is agreed that in the event Tenant defaults in respect of any of the provisions of this Lease, including, but not limited to, the payment of Rent or Additional Rent, Landlord may use, apply or retain the whole or any part of the security so deposited to the extent required for the payment of any Rent or Additional Rent or any other sum as to which Tenant is in default, or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease, including but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord.  In the event that the security is reduced by reason of the foregoing, Tenant shall promptly pay to Landlord the amount of such reduction, to the intent that the full amount of the security set forth above shall be held by Landlord throughout the Term.  In the event that Tenant shall fully and faithfully comply with all of the provisions of this Lease, the security shall be returned to Tenant on the expiration of this Lease and after delivery of entire possession of the Premises to Landlord.

 

20.                                 Non-Waiver.

 

20.1                           Neither a failure by the Landlord to exercise any of its options hereunder, nor failure to enforce its rights or seek its remedies upon any default, nor the acceptance by the Landlord of any Rent or Additional Rent accruing before or after any Event of Default, shall affect or constitute a waiver of the Landlord’s right to exercise such option, to enforce such right, or to seek such remedy with respect to that default or to any prior or subsequent default.

 

21.                                 Limitation of Liability.

 

21.1                           Notwithstanding anything to the contrary herein provided in this Lease, each and every term, covenant, condition and provision of this Lease is hereby made specifically subject to the provisions of this Section 21.  The term “Landlord” as used in this Lease shall mean only the owner for the time being so that in the event of any assignment of said leasehold estate Landlord shall be and is hereby entirely freed and relieved of all obligation and liability for anything and everything occurring after such assignment hereunder, and it shall be deemed, without further agreement between the parties and such assignee, that the assignee has assumed and agreed to observe and perform all obligations of Landlord hereunder.  Tenant further agrees that in the event of any claim against the Landlord hereunder, or in any way relating to the use and occupancy of the Premises, Tenant shall only have recourse to the assets of Landlord and no claim shall lie, nor shall any recourse be had against the individual partners or principals from time to time comprising Landlord and their personal assets.

 

22.                                 Notices.

 

22.1                           All notices and other communications hereunder shall be in writing and shall be delivered personally, sent by overnight courier, or mailed by first class, prepaid,

 

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registered or certified mail, return receipt requested, addressed (a) to Landlord originally named herein at its address set forth herein; and (b) to Tenant, to its address at the Premises, or if Tenant has vacated, at Tenant’s last known address, or at such other address as the parties may designate by notice given in accordance with the provisions of this Section.  Any notice given hereunder shall be deemed served upon delivery or upon refusal of receipt by the addressee.  Any notice can be given by an attorney for either party hereto.

 

23.                                 Estoppel Certificates.

 

23.1                           Tenant shall, without charge, at any time and from time to time, within ten (10) days after written request by Landlord, certify by written instrument delivered to Landlord or any other person, firm or corporation specified in such request, to the best of its knowledge: (a) that the Lease has not been supplemented or amended and if so, the substance and manner of such supplement or amendment; (b) that the Lease is in force and effect in accordance with its terms as then constituted; (c) that no circumstances exist which do, or would with the passage of time constitute a default hereunder; (d) that no offsets, counterclaims or defenses to the enforcement of this Lease by Landlord exist; (e) as to the commencement and expiration dates of the Term of this Lease and the last payment of Rent and Additional Rent hereunder; and (f) as to any other matters as may reasonably be so requested.

 

24.                                 Holdover.

 

24.1                           In the event that Tenant shall remain in possession of the Premises after the expiration or termination of the Term granted under this Lease, then Tenant agrees that, in addition to any other rights or remedies Landlord may have under this Lease or at law, Tenant shall pay to Landlord one and one half (11⁄2) times the Rent per month for each month and for each portion of any month that Tenant remains in possession of the Premises, which Landlord and Tenant mutually acknowledge to be reasonable liquidated damages on account of the damages that Landlord will sustain and not as a penalty.

 

25.                                 Governing Law.

 

25.1                           This Lease and shall be governed by and construed and construed in accordance with the laws of the State of New York and Tenant hereby submits to the jurisdiction of the Courts, federal and state, located in the State of New York, with respect to may matter or dispute arising with respect to the Premises or this Lease.

 

26.                                 Partial Invalidity.

 

26.1                           If any term, covenant, condition or provision of this Lease or the application thereof to any person or circumstance shall, at any time or to any extent, be invalid or unenforceable, the remainder of this Lease, shall not be affected thereby, and each term, covenant, condition and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

 

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27.                                 Interpretation.

 

27.1                           Wherever herein the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and vice versa, as the context shall require.  This Agreement of Lease may be executed in several counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.  The term “Landlord” wherever used herein shall mean only the owner at the time of Landlord’s interest herein, and upon any sale or assignment of the interest of the Landlord, its respective successors in interest and/or assigns shall, during the term of their ownership of their respective estates herein, be deemed to be the Landlord.

 

28.                                 Waiver of Trial by Jury.

 

28.1                           The Landlord and the Tenant do hereby waive trial by jury in any action, proceeding or counterclaim brought by either against the other upon any matters whatsoever arising out of or in any way connected with this Lease, the Tenant’s use or occupancy of the Premises and/or any claim of injury or damage.

 

29.                                 Section Headings.

 

29.1                           The section headings used herein are for reference and convenience only and shall not affect the import or interpretation of any of the provisions hereof.

 

30.                                 Entire Agreement, Termination of Previous Lease.

 

30.1                           This Lease contains the entire agreement between the parties and supersedes all prior and contemporaneous agreements, representations, statements, and understandings whether oral or written between the parties relating to the Premises, which shall henceforth be of no further force or effect.  Without limiting the foregoing the lease of the Premises between the parties dated as of January 1, 2002 is hereby terminated with immediate effect and neither party shall have any further rights or obligations thereunder.  This Lease cannot be changed or terminated orally and cannot be orally waived.

 

31.                                 Heirs, Successors and Assigns.

 

31.1                           The covenants, conditions and agreements contained in this Lease shall bind and inure to the benefit of the parties and their respective heirs, distributees, executors, administrators, successors and assigns.

 

Remainder of page intentionally left blank

 

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

 

	
 
    	
BDP REALTY ASSOCIATES,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Member
    
	
 
    	
 
    
	
 
    	
PLANET GROUP, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Graham Arad, SVP
    

 

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SCHEDULE A

 

Plan of the Premises

 

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