Document:

Exhibit

10.12

 

SUBLEASE

BETWEEN DEUTSCHE BANK SECURITIES, INC.

SUBLANDLORD AND TESSCO TECHNOLOGIES INCORPORATED,

SUBTENANT

 

SUBLEASE made as of the 21st day of November, 2002, by

and between DEUTSCHE BANK SECURITIES INC. (successor by merger to Alex. Brown

& Sons Incorporated), a Delaware corporation, having an office at 1251

Avenue of the Americas, Mail Stop 2804, New York, New York 10020, Attention:

Leasing Officer (hereinafter called “Sublandlord”), and, a TESSCO TECHNOLOGIES

INCORPORATED having an office at 375 West Padonia Road, Timonium, Maryland

21093 (hereinafter called “Subtenant”).

 

W I T N E  S S E T H:

 

WHEREAS:

 

A.                                   By

lease dated November 28, 1986, as amended by Amended and Restated First

Amendment to Lease dated October 29, 1987, Second Amendment to Lease dated

January 26, 1989, Third Amendment to Lease (letter Agreement) dated January 23,

1989, Fourth Amendment to Lease dated October 24, 1990, Amended and Restated

Fifth Amendment to Lease dated November 11, 1992, Sixth Amendment to Lease dated

September 13, 1993 and Seventh Amendment to Lease dated December 31, 1997,

letter dated June 9, 1999 (the “Overlease”), Atrium Building, LLC (hereinafter

called “Overlandlord”) leased to Sublandlord certain space (hereinafter called

the “Premises”) in the building known as 375 West Padonia Road, Timonium,

Maryland (hereinafter called the “Building”) constituting 84,354 leaseable

square feet comprised of 50,712 leaseable square feet on the first floor and

33,642 leaseable square feet on the second floor  of the Building, and being all of the space leased under the

Overlease.  A copy of the Overlease is

annexed hereto as Exhibit A.

 

B.                                     Sublandlord

and Subtenant desire to consummate a subleasing of the entire Premises in

stages consisting of the Data Room and Phone Switch Area consisting of 2,500

leaseable square feet in the first floor and the entire portion of the Premises

on the second floor, for a total of 36,142 leaseable square feet (“First

Stage”) and the balance of the Premises on the first floor consisting of 48,212

leaseable square feet (the “Second Stage”), as outlined on Exhibit B annexed hereto and made a part hereof in

such Stages or blocks thereof as the Commencement Date thereof occurs pursuant

to this Sublease (collectively, the “Subleased Premises”), on the terms and

conditions contained in this agreement (hereinafter called the “Sublease”).

 

C.                                     Capitalized

terms used herein without definition which are defined in the Overlease shall

have the same meaning herein as given to such terms in the Overlease.

 

 

NOW, THEREFORE, in consideration of the mutual

covenants and agreements hereinafter contained, it is hereby agreed as follows:

 

1.                                       Subleased

Premises, Term and Fixed Rent.

 

1.1                                 (a)                                  Sublandlord

hereby leases to Subtenant and Subtenant hereby hires from Sublandlord the

Subleased Premises, for a term (the “Sublease Term”) to commence (i) as to the

First Stage upon Sublandlord’s receipt of Overlandlord’s written consent to the

Sublease (hereinafter called the “Sublease Commencement Date”); and (ii) as to

the entire Second Stage (or blocks thereof) upon the earlier of (A) April 1,

2003 or (B) such date after December 15, 2002 that the entire Second Stage or

blocks of space thereof is, in either case, available for occupancy by

Subtenant, provided that Sublandlord gives Subtenant at least sixty (60) days

prior notice of such earlier availability date stating the number of leaseable

square feet in such Second Stage or such block and the date of availability

thereof, or (C) as to the entire Second Stage or any portion of the Second

Stage which is available for occupancy by Subtenant and Subtenant takes

occupancy thereof, the date on which the entire Second Stage or such portion of

such Second Stage is available for occupancy by Subtenant and Subtenant takes

occupancy thereof (occupancy as used herein 

includes any possession thereof by Subtenant for any purpose and

available for occupancy shall mean free of occupancy by Sublandlord’s employees

or by any third party other than Canterbury as to the Canterbury Space),

provided, however, if the entire Second Stage has not been made available for

occupancy by Subtenant on or before April 1, 2003, other than  due to an act or omission of Subtenant, its

agents, contractors or employees, the April 1, 2003 date shall be postponed

until the entire Second Stage or such blocks thereof is so made available, and

provided, further,  however no such date

shall be prior to the Sublease Commencement Date (the date on which the Second

Stage or the first block in the Second Stage is so made available to Subtenant

or Subtenant so takes occupancy thereof, is hereinafter called the “Second

Stage Commencement Date”), and to end on May 30, 2004 as to ten (10) leaseable

square feet in the northeast corner of the second floor of the Subleased

Premises and on May 31, 2004 as to the balance of the Subleased Premises, or on

such earlier date on which this Sublease 

may be cancelled or terminated pursuant to any of the provisions of this

Sublease or the Overlease or pursuant to law (hereinafter called the “Sublease

Expiration Date”).

 

(b)                                 The

Subtenant shall pay to Sublandlord annual fixed rent for the Term (the “Fixed

Rent”) of $43,822.18 per month from and after the Sublease Commencement Date

until the day prior to the Second Stage Commencement Date, and $43,822.18 per

month from and after the Second Stage Commencement Date plus $1.22 per month

per leaseable square foot of space in the Second Stage or each block in the

Second Stage from and after the Second Stage or such block having been so made

available to Subtenant or Subtenant so takes occupancy thereof, until all of

the space in the Second Stage has been so made available or Subtenant so takes

occupancy thereof (the “Final Delivery Date”) when the Fixed Rent shall be

$102,279.23 per month (“the Rent Commencement Date”).  Such Fixed Rent shall be payable at Sublandlord’s office provided

therefor in Section 7.1 hereof (or such other location as Sublandlord shall

designate) by check drawn on a bank which is either (i) a member of the New York

Clearing House Association or (ii) Bank

of America N.A. or a similar banking institution, in advance in equal

monthly installments, without prior demand, offset, abatement or deduction,

except as expressly provided herein, on or before the 25th day of

 

2

 

each month in respect of the next succeeding month during the Sublease

Term, commencing on the Sublease Commencement Date.

 

(c)                                  The

License Agreement dated October 25, 2002 between Sublandlord and Subtenant is

superseded by this Sublease from and after the Sublease Commencement Date and

any license fee paid thereunder as to any period after the Sublease

Commencement Date shall be applied to the Fixed Rent payable under this

Sublease.

 

(d)                                 If

the Rent Commencement Date as to any Stage (or as to the Second Stage, at the

date any block of space in the Second Stage is so made available) occurs on a

day other than the first day of a month, Fixed Rent from such day until the

first day of the following month shall be prorated and shall be payable, in

advance, on the applicable Rent Commencement Date (or such block delivery

date).

 

(e)                                  Notwithstanding

the foregoing, if Subtenant is not in monetary default or material nonmonetary

default (beyond any applicable notice and opportunity to cure as to such

nonmonetary default) hereunder on May 1, 2004, Subtenant shall not be obligated

to pay Fixed Rent for last month of the Term.

 

(f)                                    Subtenant

shall accept this Sublease of the Subleased Premises in the Second Stage outlined in Exhibit C attached hereto

(the “Canterbury Space”) subject to that certain Sublease dated July 31, 1987,

and amended April 30, 1997, by and between Sublandlord’s predecessor in

interest, as sublandlord, and Canterbury Delly Inc. (“Canterbury”) as subtenant

(the “Canterbury Sublease”) of the Canterbury Space.  On the date when the Canterbury Space becomes part of the

Subleased Premises in accordance with Section 1.1(a) hereof (the “Canterbury

Space Delivery Date”), the provisions of the Assignment and Assumption

Agreement (Canterbury Sublease) attached hereto as Exhibit C shall become

effective, and in confirmation thereof Sublandlord and Subtenant shall execute

and deliver the Assignment and Assumption Agreement (Canterbury Sublease) and

Sublandlord and Subtenant shall notify Canterbury that from and after the

Canterbury Space Delivery Date the Sublandlord’s interest in the Canterbury

Sublease has been assigned to Subtenant and Subtenant shall be the sublandlord

thereunder from and after the Canterbury Space Delivery Date.  Sublandlord represents that the equipment

referred to in the Canterbury Sublease as being covered by an equipment lease

was purchased pursuant thereto by Canterbury. 

Sublandlord shall no later than thirty (30) days prior to the Canterbury

Space Delivery Date request that Canterbury execute and deliver an estoppel

certificate as to the matters referred to in Section 2.10, but as the estoppel

is not required by the Canterbury Sublease, Sublandlord shall have no

obligation or liability for failure to obtain such estoppel.

 

(g)                                 Sublandlord

shall use best commercial efforts to cause the Final Delivery Date to occur by

April 1, 2003.

 

1.2                                 (a)                                  In

addition to the provisions of Section 4.1 hereof regarding Escalation Rent (as

defined in Section 4.1 hereof), Subtenant shall also pay to Sublandlord, as

additional rent under this Sublease, the applicable Subtenant’s Proportionate

Share of all other additional rent and other charges payable by Sublandlord to

Overlandlord pursuant to the Overlease, provided, however, Subtenant shall pay

one hundred (100%) percent  of all

charges for work, 

 

3

 

utilities, services and/or labor provided to the Subleased Premises by

Overlandlord during any time that is not normal business hours or in excess of

work, services, utilities and/or labor provided for in the Overlease to be

without charge or fee to the Subleased Premises, or at the request of

Subtenant, and charges with respect to alterations to the Subleased Premises by

Subtenant.  For the purposes hereof,

Subtenant’s Proportionate Share is a percentage based on a fraction, the

numerator of which is the leaseable square feet in the Subleased Premises from

time to time in stages and blocks pursuant to Section 1.1(a) hereof and the

denominator of which is 84,354 leaseable square feet, until the Final Delivery

Date when the Subtenant’s Proportionate Share shall be 100%.

 

(b)                                 Until

the Final Delivery Date, Subtenant shall pay to Sublandlord as additional  rent hereunder $1.80 per annum per leaseable

square foot of the Subleased Premises, in lieu of paying for electric supplied

to the Subleased Premises directly to the provider. On the Final Delivery Date,

Section 8.1 of the Overlease shall be incorporated pursuant to Section 2.1(a)

hereof and Subtenant shall arrange for payment by Subtenant directly to the

provider of all electric supplied to the Subleased Premises.

 

1.3                                 All

such additional rent and other charges so payable by Subtenant shall be paid

within twenty (20) days after Subtenant’s receipt of the bill therefor, without

offset, abatement or deduction.

 

1.4                                 If

Subtenant shall default in the payment of any sums due under this Section 1 or

of any Escalation Rent beyond any applicable notice and cure period, in addition

to any other right or remedy, Sublandlord shall have the same rights and

remedies as in the case of a default by Subtenant in the payment of Fixed Rent.

 

1.5                                 Subtenant

shall have the use of its applicable Subtenant’s Proportionate Share of the

parking spaces in the Building parking areas available to Sublandlord under the

Overlease.  Subtenant’s rights to and

its use of the Building parking areas is subject to the terms and conditions of

the Overlease and the Rules and Regulations of the Overlandlord, and Subtenant

shall comply therewith.

 

1.6                                 This

Sublease is conditioned upon the consent thereto by Overlandlord, which consent

shall be evidenced by Overlandlord’s signature appended hereto or a separate

consent in the standard form utilized by Overlandlord for such purposes so long

as such form of consent does not materially and adversely affect either of the

parties’ respective rights and obligations hereunder (unless such requirement

be waived by the party adversely affected thereby).  Sublandlord agrees promptly to request such consent, but

Sublandlord shall have no responsibility or liability whatsoever if such

consent is refused or not obtained for any reason whatsoever or for no reason.

Subtenant agrees to cooperate with Sublandlord with respect thereto and to

furnish all financial statements, references and other data with respect to

Subtenant as Overlandlord may reasonably request in accordance with the

provisions of the Overlease and execute and deliver such consent form provided

by Overlandlord.  In the event that

Overlandlord notifies Sublandlord that Overlandlord will not give such consent,

Sublandlord will so notify Subtenant this Sublease shall be deemed to be

canceled and without force or effect. 

In the event that the previous sentence does not apply but Sublandlord

does not receive such consent of Overlandlord by November 25, 2002, then, upon

written notice to the other, Sublandlord or

 

4

 

Subtenant may cancel this Sublease, and upon the giving of such notice,

this Sublease shall be deemed canceled and of no further force or effect.  If either of the two (2) previous sentences

shall be applicable, Sublandlord and Subtenant shall have no further obligations

or liabilities to the other with respect to this Sublease.

 

1.7                                 Sublandlord

shall use reasonable commercial efforts to procure (i) a non-disturbance and

recognition agreement from the Overlandlord in favor of this Sublease

(“Recognition Agreement”), which shall provide among other things that so long

as this Sublease shall be in full force and effect, and Subtenant shall not be

in default following the applicable notice and/or cure period, in the event of

the termination of the Overlease due to Sublandlord’s default thereunder

without the default of Subtenant hereunder, then this Sublease shall remain in

full force and effect and Subtenant will attorn to Overlandlord and Subtenant’s

rights herein shall remain undisturbed, and (ii) an estoppel certificate by

Overlandlord as to the Overlease and the matters referred to in Section 2.10

hereof (an “Estoppel”), provided, however, Sublandlord shall not be required to

commence any litigation, make any payment or expend any sums, other than the

normal out-of-pocket expenses of making a request therefor.  The failure to obtain such Recognition

Agreement and/or Estoppel shall not affect any of the other rights and

obligations of Subtenant and Sublandlord under this Sublease, nor shall such

Recognition Agreement and/or Estoppel be a condition to, or create a delay in,

obtaining the consent of Overlandlord as provided in Section 1.6 hereof, and

such consent shall be deemed obtained even if such Recognition Agreement and/or

Estoppel is not obtained.

 

2.                                       Provisions

of Overlease, Etc.

 

2.1                                 From

and after the Sublease Commencement Date, all of the terms, covenants,

conditions and provisions in the Overlease accruing from and after the Commencement Date are hereby

incorporated in, and made a part of this Sublease, except as herein otherwise

expressly provided, and except those which are inconsistent with or modified by

any of the terms, covenants or conditions of this Sublease, and except for the

obligation to pay rent and additional rent under the Overlease; and such rights

and obligations as are contained in the Overlease are hereby imposed upon the

respective parties hereto with the same force and effect as if

(i) references in the Overlease to the “Lease” and to the “Premises” were

references, respectively, to this Sublease and the Subleased Premises (as to

each Stage or block of space thereof, from and after the Commencement Date

thereof pursuant to the Sublease), and (ii) references in the Overlease to

“Landlord” and “Tenant” (or “BTAB”) were references, respectively, to

Sublandlord and Subtenant and references to “Commencement Date” or

“Commencement of the Term” were references to “Sublease Commencement Date”;

provided, however, with reference to this Sublease:

 

(a)                                  For

the purposes of this Sublease, Sections 1.1 (other than 1.3) through 1.10,

1.12, 1.13, 2 (other than 2(a), 2(c) and 2(f)), 3.1, 3.3, 3.4, 3.5, 4, 5,

reference to Mercantile-Safe Deposit & Trust Co. in Section 5.2 shall mean

Mercantile Bank & Trust Company, 5.3, 5.4, 5.5, 6.1 (first sentence), 7.2,

7.4 (second sentence; it being understood that Section 7.4 as so incorporated

is modified to provide that Sublandlord shall not make alterations, additions

and improvements to the Subleased Premises so long as this Sublease is in full

force and effect as to such respective portions of the Subleased Premises

except pursuant to Section 14.2 of the Overlease as incorporated in this

Sublease), 8.3 (third sentence), 10.1, 10.2 (first sentence), 10.3, 

 

5

 

10.4, 11.1 (last sentence), 11.3 (the amount of $1,000,000 in Section

11.3 shall be $5,000,000 which may be

provided by an umbrella policy), 13 (first through fifth paragraphs),

14.1(i), 19, 20, 21, 22.7, 22.10 (second sentence), Exhibit B, First Amendment

(other than paragraph 8.1), Second Amendment, Fourth Amendment, Fifth

Amendment, Sixth Amendment and Seventh Amendment (other than paragraph 5) shall

not be deemed incorporated in or made a part hereof.

 

(b)                                 References

to “Landlord” in Sections 1.11, 1.14, 2(e), 3.2, 5.7 (second sentence), 6.1,

6.2, 7.5, 8.3, 9.1, 9.2, 9.3 (except last paragraph), 10.2 (second sentence),

11.1 (except second sentence), 11.2, 12.3, 17.2, 22.10 (first sentence),

Exhibit C and paragraph 8.1 of First Amendment of the Overlease shall,

notwithstanding the incorporation herein pursuant to clause (a), mean

“Overlandlord”.

 

(c)                                  References

to “Landlord” in Sections 6.3 (both), 9.3 (last paragraph) (both), 12.1 (both),

12.2, 12.5, 15 (both and which access rights, in the case of Sublandlord,

during the last ten (10) days of

the Subleased Term shall include the right to remove any FF&E and Special

Equipment which shall not be purchased by Subtenant pursuant to Section 3.3(e)

and 3.4 hereof (and which Sublandlord may be or is obligated to remove pursuant

to the Overlease prior to the expiration of the Overlease), 16 and 22.17 of the

Overlease shall, notwithstanding the incorporation herein pursuant to clause

(a), mean “Overlandlord” or “Sublandlord”, except where otherwise stated herein

to mean both “Overlandlord” and “Sublandlord” by the use of the word “(both)”.

 

(d)                                 References

in the Overlease as incorporated herein pursuant to clause (a) above to “Basic

Annual Rent” shall mean “Fixed Rent” herein and to “Building Expenses” and

“Taxes” payable shall mean “Escalation Rent” herein.

 

(e)                                  References

in the Overlease to work or repairs to be performed or services or maintenance

to be supplied by “Landlord” in respect of the Premises shall continue to mean

and provide that such work or repairs shall be performed and services or

maintenance provided by Overlandlord (and not by Sublandlord) pursuant to the

terms, covenants and conditions of the Overlease relating to the Subleased

Premises, as incorporated herein. 

Nothing herein shall be deemed to detract from the provisions of

Sections 2.1(i) and 2.5(d) hereof.

 

(f)                                    Except

as otherwise expressly set forth herein, all notice or cure periods of

Subtenant provided for herein or other time limits for Subtenant to give notice

or perform any act, condition or covenant, or exercise any right or remedy,

shall be the same as those provided for in the Overlease, but reduced by the

greater of 25% (rounded to the greatest reduction) or three (3) days.

 

(g)                                 Sublandlord

may, in its sole discretion, prior to the Final Delivery Date, elect to

exercise any or all of its self-help rights as Tenant under the Overlease

pursuant to Section 8.3 thereof, provided, however, in the event such self-help

rights pertain solely to the Subleased Premises, Sublandlord shall obtain the

consent of Subtenant prior to the exercise of such rights within the Subleased

Premises, except to the extent Sublandlord’s failure to exercise such rights

could adversely affect the remainder of the Premises or any portion thereof or

any of Sublandlord’s rights as Tenant under the Overlease.  Subtenant agrees that if Sublandlord elects

to exercise any such rights,  Subtenant

shall reimburse Sublandlord for Subtenant’s Proportionate

 

6

 

Share of the reasonable third party cost incurred by Sublandlord

therefor (including by reason of any indemnity of Overlandlord in connection

therewith but excluding any reimbursement therefor which has at such time been

paid by Overlandlord to Sublandlord), or if such self-help rights pertain to

only a portion of the Premises a proportionate percentage thereof, which shall

be 100% if pertaining only to the Subleased Premises, such reimbursement to be

made by Subtenant within twenty (20) days after receipt of a detailed invoice

therefor, provided that if Overlandlord shall after such payment by Subtenant

reimburse Sublandlord for all or any portion of such costs, and Subtenant is

not in default under the provisions of this Sublease, Sublandlord will

reimburse Subtenant for the amounts paid to Sublandlord by Subtenant pursuant

to this sentence to the extent of the applicable percentage thereof (in

accordance with this sentence) of such costs so reimbursed to Sublandlord from

Overlandlord.  If, however, Sublandlord

elects not to exercise any of or all such self-help rights, Sublandlord shall

not be liable to Subtenant for any costs, liabilities or expenses, all of which

are hereby released by Subtenant.  In

the event that Sublandlord notifies Subtenant that Sublandlord elects not to

exercise its self-help rights pursuant to Section 8.3 of the Overlease, or has

not given such notice but does not commence to utilize its self-help rights

pursuant to Section 8.3 of the Overlease within five (5) Business Days (or a

shorter period as may be necessary in case of an emergency) after the time Sublandlord

is permitted to do so under the Overlease or Sublandlord commences to do so but

does not diligently prosecute such right, or if such rights shall be

exercisable after the Final Delivery Date, and Overlandlord’s failure

materially interferes with Subtenant’s use of the Subleased Premises for the

conduct of its business (and does not affect (other than to a de  minimis

extent) any portion of the Premises other than the Subleased Premises),

Sublandlord agrees that Subtenant may exercise such right under said Section

8.3 in the name, place and stead of Sublandlord.  In such event, Sublandlord shall use reasonable good faith

efforts to obtain reimbursement therefor from Overlandlord pursuant to

Subsection 8.3 of the Overlease.

 

(h)                                 If

(i) Sublandlord fails to perform any of its obligations under the Overlease

(other than by reason of Subtenant’s acts or omissions, and Overlandlord has

given a notice of default with respect thereto, which failure has not been

cured continues within five (5) days in the case of a monetary default or

within ten (10) days in the case of a non-monetary default, in each case from

the date Overlandlord gives Sublandlord notice of such default;

(ii) Subtenant is not in default under this Sublease beyond any applicable

notice and/or cure period and (iii) Subtenant notifies Sublandlord after the

expiration of such five (5) day or ten (10) day period of such failure and of

Subtenant’s intention to cure same, which notice shall specify that such notice

is being given in accordance with this Section 2.1(h), and shall contain the

following statement in capitalized bold type: “IF YOU FAIL TO PERFORM THE OBLIGATION

REFERENCED IN THIS NOTICE WITHIN THE TIME PERIOD SPECIFIED IN SECTION 2.1(h) OF

THE SUBLEASE, WE SHALL EXERCISE OUR SELF-HELP REMEDIES UNDER THAT SECTION”,

and, provided that Sublandlord shall not be diligently prosecuting such cure,

then at Subtenant’s election (if Subtenant elects to exercise its cure rights

hereunder), Subtenant may two (2) days after Sublandlord’s receipt of Subtenant’s

notice take such actions as may be reasonably necessary to cure such failure

and Sublandlord shall reimburse Subtenant for the reasonable third party costs

incurred by Subtenant in performing same within thirty (30) days after receipt

by Sublandlord of a written statement from Subtenant as to the amount of such

costs, provided the performance of such obligation by work or labor by

Subtenant prior to the Final Delivery Date shall not take place in the portion

of the Premises which has not become part of the Subleased Premises pursuant

hereto..

 

7

 

2.2                                 (a)                                  This

Sublease and all rights of Subtenant hereunder are and shall be subject and

subordinate in all respects to the Overlease and all of the terms, covenants,

agreements, provisions and conditions of the Overlease, and to all

modifications, amendments and extensions of the Overlease and to all of

Sublandlord’s obligations under the Overlease. Sublandlord agrees with

Subtenant that so long as Subtenant is not in default hereunder, beyond any

applicable notice and/or cure period, Sublandlord shall not enter into any

modification or amendment to the Overlease which will prevent or materially

adversely affect the use by Subtenant of the Subleased Premises in accordance

with the terms of this Sublease, increase the obligations of Subtenant or

decrease its rights under the Sublease or in any other way materially adversely

affect Subtenant.  Notwithstanding the

foregoing, Subtenant and Sublandlord

agree that Sublandlord shall (if

requested by Subtenant) enter

into the Agreement Regarding Lease by and among Sublandlord, Overlandlord and

Subtenant, in the form attached hereto as Exhibit E, whereupon the Overlease

shall be deemed to include such Agreement Regarding Lease, although the same

shall not be incorporated herein pursuant to Section 2.1 hereof.

 

(b)                                 Subtenant

shall duly and fully keep, observe and perform each and every term, covenant,

provision and condition on Sublandlord’s part to be kept, observed and

performed pursuant to the Overlease as incorporated herein, including, without

limitation, the Rules and Regulations adopted by Overlandlord pursuant thereto,

except as may otherwise be specifically provided in this Sublease.  In furtherance of the foregoing and

notwithstanding anything herein to the contrary, Subtenant shall not

(i) take or permit any action inconsistent with the terms of the Overlease

or, (ii) do or (within Subtenant’s reasonable control) permit to be done

anything which Sublandlord is prohibited from doing or permitting under the

Overlease, or otherwise do or suffer to permit anything to be done which would

result in a default under the Overlease or cause the Overlease to be terminated

or forfeited, or (iii) take any action or do or (within Subtenant’s

reasonable control) permit anything to be done which could result in any

additional cost or other liability to Sublandlord under or pursuant to the

Overlease.

 

2.3                                 If

for any reason whatsoever the Overlease is terminated, by either the Overlandlord

or by Sublandlord, including, without limitation, in the event of any damage,

destruction or condemnation with respect to all or part of the Premises, this

Sublease shall thereupon be terminated, and Sublandlord shall not be liable to

Subtenant by reason thereof for any loss, cost or expense incurred by Subtenant

in connection therewith, unless said termination shall have been effected

because of the breach or default of Sublandlord under the Overlease (and

Subtenant is not in default hereunder beyond any applicable notice and/or cure

period as to the corresponding breach under this Sublease) or voluntary

surrender of the Overlease by Sublandlord to Overlandlord (which shall not be

deemed to include a right of termination by reason of casualty or condemnation),

provided that in no event shall Sublandlord be liable to Subtenant for any

loss, cost or expense incurred by Subtenant if Overlandlord shall accept an

attornment by Subtenant to Overlandlord upon substantially the same (or more

favorable to Subtenant) terms as provided in this Sublease and provided further

that in no event shall Sublandlord be liable for any special, consequential or

punitive damage to Subtenant.

 

2.4                                 [Intentionally

Omitted]

 

8

 

2.5                                 (a)                                  Notwithstanding

anything to the contrary contained in this Sublease, Subtenant shall not under

any circumstances seek or require Sublandlord to perform or provide or to cause

there to be  performed or provided any work

(except as expressly provided for herein), services, maintenance or

repairs.  Subtenant only receive such

work and such services, utilities, parking facilities, maintenance and repairs

which pursuant to the terms of this Sublease Overlandlord is or may be

obligated to furnish or to do, in or about the Subleased Premises or Building

pursuant to the terms of the Overlease. 

Nothing herein shall be deemed to detract from the provisions of

Sections 2.1(i) and 2.5(d) hereof.

 

(b)                                 Subject

to the provisions of Section 1.2(a) hereof, Subtenant may request any work,

services, utilities, parking facilities, maintenance or repairs by Overlandlord

for which Overlandlord may charge Sublandlord under the Overlease, subject to

the consent of Overlandlord, except if Subtenant is in default beyond any applicable

notice and/or cure periods in payment for any such work, services, utilities,

maintenance and repairs previously so provided to the Subleased Premises or

otherwise under this Sublease.  In the

event Subtenant desires any additional services from Overlandlord which are not

provided in the Overlease and require an additional charge, Subtenant may

request such additional services from Overlandlord, provided such services

shall not be obtained pursuant to the Overlease and Overlandlord so agrees and further

agrees that Sublandlord shall have no liability therefor.

 

(c)                                  Sublandlord

shall in no event be liable to Subtenant nor , except as may be expressly

provided in this Sublease, shall the obligations of Subtenant hereunder be

impaired or abated or the performance hereof by Subtenant be excused because of

(i) any failure or delay on Overlandlord’s part in furnishing any

services, utilities, parking facilities or maintenance or in doing such repairs

or work, including those which may be contemplated by this Sublease,

(ii) any other failure of the Overlandlord to observe and perform its

covenants and agreements pursuant to the Overlease, or (iii) the acts or

omissions of the Overlandlord, its agents, contractors, servants, employees,

invitees, or licensees.  If Overlandlord

shall default in any of its obligations to Sublandlord with respect to the

Subleased Premises, Sublandlord will use reasonable efforts to cause

Overlandlord to perform and observe such obligations (except that Sublandlord

shall not be obligated to commence any legal proceedings against Overlandlord

except as provided in Section 2.5(d) hereof, use any self-help rights or to

make any payment of money or other consideration), but Sublandlord shall have

no liability for failure to obtain the observance or performance of such

obligations by Overlandlord or by reason of any default of Overlandlord under

the Overlease, of any failure of Overlandlord to act or to grant any consent or

approval under the Overlease, or from any misfeasance or nonfeasance of

Overlandlord, nor shall the obligations of Subtenant hereunder be excused or

abated in any manner by reason thereof except as otherwise expressly provided

herein.  If Sublandlord elects to

commence legal or other proceedings against the Overlandlord to enforce

Sublandlord’s rights under the Overlease which are applicable to Subtenant and

the Subleased Premises as well as to the Sublandlord as tenant as to the

remainder of the Premises, and if Subtenant requested Sublandlord to do so in

writing or consented to Sublandlord doing so in writing, Subtenant shall be

responsible to reimburse Sublandlord for Subtenant’s Proportionate Share of the

reasonable third party costs of such proceedings, including, without

limitation, reasonable attorneys’ fees incurred by Sublandlord or if such

pertain only to a portion of the Premises a proportionate percentage thereof,

provided that Subtenant shall reimburse Sublandlord for one hundred (100%)

 

9

 

percent thereof if such pertain only to the Subleased Premises), such

reimbursement to be made by Subtenant within twenty (20) days after demand

therefor.

 

(d)                                 If

Subtenant requests Sublandlord to institute legal, insurance premium contest

(pursuant to the last sentence of Section 11.1 of the Overlease) or audit

proceedings against Overlandlord in the name of Sublandlord to enforce

Sublandlord’s rights as Tenant under the Overlease, but Sublandlord shall elect

not to do so (which election must be made within five (5) Business Days after

receipt by Sublandlord of Subtenant’s request), Sublandlord shall promptly, at

Sublandlord’s option, either (i) assign to Subtenant its causes of action or

rights against Overlandlord to the extent applicable to Subtenant, the

Subleased Premises or Subtenant’s rights hereunder and shall permit Subtenant

to institute such legal, insurance premium contest or audit proceeding against

Overlandlord in the name of Subtenant or, if necessary in order to effectuate

the benefit of such assignment, in the name of Sublandlord, provided Subtenant

shall use counsel reasonably approved by Sublandlord if prosecuted in the name

of Sublandlord (but Sublandlord hereby approves Neuberger, Quinn, Gielen, Rubin

& Gibber, P.A. or (ii) institute legal, insurance premium contest or audit

proceedings against Overlandlord at the request  of Subtenant in the name of Sublandlord, provided in either of

(i) or (ii) that (A) Subtenant shall not then be in default under this

Sublease, of which default Subtenant shall have been given notice, (B) such

proceeding shall be prosecuted at the sole cost and expense of Subtenant and

Subtenant shall agree to indemnify and hold harmless Sublandlord from any

claims, liabilities, damages, costs and expenses, including any reasonable

attorneys’ fees incurred by Sublandlord as a result of Subtenant exercising its

rights under this subsection, (C) such proceeding is a bona fide attempt by

Subtenant to enforce Sublandlord’s rights under the Overlease applicable to

Subtenant and the Subleased Premises and is not primarily of nuisance value and

(D) Subtenant shall not settle such proceeding without the prior written

consent of Sublandlord, if such settlement would impose any liability on

Sublandlord or amend or modify the Overlease.

 

(e)                                  If

as a result of the provisions of Section 10.2 or 12.4 of the Overlease,

Overlandlord has abated any of the base rents and tax and operating expense

reimbursements or other additional rent payable by Sublandlord as tenant of the

Subleased Premises under the Overlease, with respect to the Subleased Premises

Sublandlord shall, without duplication of any other provision of this

Sublease,  correspondingly abate the

Fixed Rent and/or Escalation Rent or other additional rent payable under this

Sublease as to all or part of the Subleased Premises, as applicable under the

Overlease as to which rent is abated under the Overlease and for as long as

such abatement shall continue under the Overlease, provided, however, nothing

herein shall be deemed to detract from the provisions of Sections 2.5(c) and

(d) hereof.

 

2.6                                 If

in this Sublease, Subtenant is required to obtain Sublandlord’s consent or

approval, Subtenant understands that Sublandlord may be required to first

obtain the consent or approval of Overlandlord pursuant to the Overlease which

Sublandlord agrees to promptly seek from Overlandlord prior to Sublandlord

giving its consent or approval thereto if Subtenant so requests together with

its request given to Sublandlord therefor. 

Sublandlord will, in any event, cooperate with Subtenant in requesting

any such consent or approval.  Subtenant

shall reimburse Sublandlord for any reasonable costs or expenses payable under

the Overlease or otherwise reasonably incurred to third parties by Sublandlord

in connection with requesting Overlandlord’s consent or approval on behalf of

Subtenant with respect to any matter as to which Overlandlord’s

 

10

 

consent or approval is required under the Overlease or hereunder.  If Overlandlord should refuse such consent

or approval, Sublandlord shall be released of any obligation to grant its

consent or approval with respect to such matter whether or not Overlandlord’s

refusal, in Subtenant’s opinion, is arbitrary or unreasonable, provided,

however, nothing herein shall be deemed to detract from the provisions of

Sections 2.5(c) and (d) hereof.  It is

understood and agreed that Subtenant shall not be required to obtain

Sublandlord’s consent pursuant to the provisions of Sections 7.5 and 9.3 of the

Overlease as incorporated herein.

 

2.7                                 [Intentionally

Omitted]

 

2.8                                 Subtenant

expressly agrees that if, for any reason, the Overlease should be terminated

prior to the expiration date therein set forth or if Overlandlord shall succeed

to Sublandlord’s estate in the Subleased Premises, then (except as may be

provided in any Recognition Agreement) at Overlandlord’s election Subtenant

shall attorn to and recognize Overlandlord as Subtenant’s landlord under this

Sublease, any provision of law to the contrary notwithstanding.  Subtenant shall promptly execute and deliver

to Overlandlord any certificate or other instrument Over-landlord may request

to evidence such attornment.

 

2.9                                 Sublandlord

agrees to promptly forward to Subtenant, upon receipt thereof by Sublandlord, a

copy of each notice of default received by Sublandlord in its capacity as

tenant under the Overlease and that Sublandlord shall concurrently provide

Subtenant with a copy of any notice of default which it sends to Overlandlord

during the Sublease Term.  Subtenant

agrees to promptly forward to Sublandlord, upon receipt thereof, copies of any

notices received by Subtenant with respect to the Subleased Premises from

Overlandlord or from any governmental authorities.

 

2.10                           Sublandlord

represents that (i) it is the holder of the interest of the tenant under the

Overlease, (ii) the Overlease is in full force and effect, and (iii) to the

best of Sublandlord’s knowledge, neither Sublandlord nor Overlandlord are

currently in default thereunder.

 

2.11                           Subtenant

agrees to indemnify Sublandlord and hold Sublandlord harmless from all losses,

damages, liabilities and expenses (including, without limitation, reasonable

attorneys’ fees and expenses) that Sublandlord may incur, or for which

Sublandlord may be liable, to the Overlandlord, arising from the acts or

omissions of Subtenant, Subtenant’s agents, contractors, employees, invitees,

or licensees, that are the subject matter of any indemnity or hold harmless of

Sublandlord to Overlandlord under the Overlease, and all amounts payable by

Subtenant to Sublandlord on account of such indemnity shall be deemed to be

rent hereunder and shall be payable upon demand or otherwise.

 

3.                                       “As

Is”; Delivery of Subleased Premises; Equipment and FF&E in Subleased

Premises.

 

3.1                                 Subtenant

has examined the Subleased Premises, is aware of the physical condition

thereof, and agrees to take the same “as is,” with the understanding that there

shall be no obligation on the part of Sublandlord to incur any expense

whatsoever in connection with the preparation of the Subleased Premises for

Subtenant’s occupancy thereof.  Neither

Sublandlord nor Sublandlord’s agents or other representatives have made, nor

has Subtenant relied upon, any representations, warranties, or promises,

express or implied, with respect to the Subleased

 

11

 

Premises or the equipment and improvements therein situated or serving

the same or the physical condition thereof or Overlandlord’s or Sublandlord’s

title thereto, or compliance with laws with respect thereto or with respect to

any other matter or thing relating to the Subleased Premises.

 

3.2                                 Sublandlord

shall not be subject to any liability for failure to give possession of any

Stage of the Subleased Premises and the validity of this Sublease shall not be

impaired under such circumstances, nor shall the same be construed in any way

to extend the term of this Sublease, nor shall the rents payable hereunder be

abated.

 

3.3                                 (a)                                  Prior

to the Final Delivery Date, Sublandlord will permit Tenant to connect to

and/or  utilize, as hereinafter

provided, the uninterrupted power system (“UPS”), back-up emergency generator

and associated underground fuel storage tank (“EPS”), the Leibert Supplemental

HVAC (“Leibert”), the Key Card Access System (including on-site system

infrastructure, Badge Readers, video and recording equipment, and cameras but

not including the off-site server or recording equipment infrastructure (“Key

Card”), Cisco Switches and   Routers (

excluding the two 6500 units) (“Cisco Equipment”), Paging System and

infrastructure (“Paging System”), and Light Interface Units in the data center

closets (“LIUs”). Subtenant as an occupant of the Building may receive the

benefit of the two 13.2 KvA feeders (transformer size 3 phase 100 KvA 120) with

transfer switches installed by the public utility servicing the Building (the

“Electric Switch”).  The UPS, EPS,

Leibert, Key Card, Cisco Equipment, Paging System,  LIUs and Electric Switch are collectively referred to as “Special

Equipment”.  Prior to the Final Delivery

Date, Sublandlord shall have no obligation to repair or, if necessary, replace

the Special Equipment unless requested in writing to do so by Subtenant as to

any particular Special Equipment (provided that unless Subtenant wishes

Sublandlord to repair or replace the particular Special Equipment which is in

need of repair or replacement in order to be operable by so advising

Sublandlord in writing to so repair and/or replace, Sublandlord shall have no

further obligation to operate or maintain such particular Special

Equipment).  Subject to the foregoing,

Subtenant may connect to and/or 

utilize, the Special Equipment, at the times and in the allocable shares

thereof as hereinafter set forth and until the Final Delivery Date: Subtenant’s

Proportionate Share from time to time of the KVA of EPS/UPS capacity from and

after the Sublease Commencement Date and until the Final Delivery Date;

Subtenant’s share, based on the portion of the Subleased Premises which

constitutes the data center as compared to the entire data center, of the

tonnage of the Leibert, from and after the time that any portion of the data

center becomes part of the Subleased Premises; Subtenant’s Proportionate Share

of the Key Card, from and after the Sublease Commencement Date; the Cisco

Equipment which is in the Subleased Premises as each portion of the Premises

becomes the Subleased Premises until the Final Delivery Date, 0% of the Paging

System until the Final Delivery Date; and Subtenant’s share, based on the

portion of the Subleased Premises which constitutes the data center as compared

to the entire data center, of the  LIUs

from and after the time that any portion of the data center becomes part of the

Subleased Premises.  From and after

applicable date as set forth above on which Subtenant may connect to and/or

utilize the applicable Special Equipment until the Final Delivery Date,

Subtenant shall pay its applicable share from time to time of the Sublandlord’s

reasonable third party costs (exclusive of electric) to maintain in accordance

with Sublandlord’s normal standards and operate, and as to any Special

Equipment as to which Subtenant has so requested Sublandlord to repair, to

repair and, if necessary, replace if Subtenant has so requested Sublandlord to

replace, each of the particular Special Equipment as to which Subtenant has so

requested Sublandlord, but provided

 

12

 

Subtenant has paid to Sublandlord the applicable costs thereof as

provided in this paragraph, and provided, further, however, Subtenant shall pay

100% of Sublandlord’s reasonable third party costs to repair and, if necessary

replace, any Special Equipment to the extent damaged due to Subtenant’s

acts.  Sublandlord shall bill Subtenant

from time to time and Subtenant shall pay Sublandlord the Subtenant’s

applicable share of costs as aforesaid within twenty (20) days after being

billed therefor as and to the extent set forth above in this paragraph,

provided that at Sublandlord’s election, Subtenant’s payment as to any repair

or replacement shall be made by Subtenant prior to Sublandlord being obligated

to make such repair or replacement. 

Notwithstanding the foregoing, from and after the Final Delivery Date,

Subtenant may, from time to time, at Subtenant’s option and at its sole cost

and expense, operate and shall, if it so operates, maintain, and shall, to the

extent required by Subtenant’s acts or (to the extent required by the Overlease

as to such Special Equipment which Subtenant is operating) omissions, repair

and, if necessary, replace, some or all of the Special Equipment, and

Sublandlord shall have no responsibility with respect thereto.

 

(b)                                 Until

the Final Delivery Date, Sublandlord may perform repair and periodic

maintenance shutdowns of the Special Equipment.  Sublandlord shall make commercially reasonable efforts to inform

Tenant in advance of scheduled system maintenance shutdowns and shall make

commercially reasonable efforts to reduce the extent of the interruptions in

service.

 

(c)                                  Sublandlord

shall not be liable or responsible to Tenant in any way for any loss, damage or

expense which Subtenant may sustain or incur as a result of any failure or

defect in any of the Special Equipment furnished to Tenant pursuant to this

Section.  In no event shall Sublandlord

be liable for special, consequential or punitive damages for any breach or

failure arising under this Section.

 

(d)                                 Sublandlord

makes no representations or warranties, express or implied, as to the Special

Equipment, both as to their condition and as to their fitness for Subtenant’s

purposes, and Subtenant shall accept the same “as is”.

 

(e)                                  If

Subtenant is not in monetary default or in nonmonetary default (beyond any

applicable notice and/or cure period as to such nonmonetary default) hereunder

as of the last day of the Term, the provisions of the Bill of Sale attached

hereto as Exhibit D shall become effective as of the last day of the Term as to

all of the Special Equipment which Subtenant has notified Sublandlord at least forty-five

(45) days prior thereto shall be included in the Bill of Sale.  In confirmation thereof Sublandlord shall

execute and deliver the Bill of Sale to Subtenant as to the particular Special

Equipment to be so included in the Bill of Sale.  If Subtenant does not timely give such notice, none of the Special Equipment shall be

conveyed to Subtenant and included in the Bill of Sale.

 

3.4                                 Sublandlord

shall provide Subtenant with the use of modular workstations and additional

furniture, fixtures and equipment in the Premises as of the date hereof (the

“FF&E”).  Subtenant shall have the

right to use the FF&E in the applicable Stage upon the Commencement Date of

such Stage (or in the case of the Second Stage, on the date when a block of

space therein is made available to Subtenant), without payment of an additional

charge or fee.  Such FF&E shall be

used in their “as is” “where is” condition. 

Sublandlord makes no representations or

 

13

 

warranties regarding the condition of such FF&E.  All FF&E provided by Sublandlord as

aforesaid shall be deemed Sublandlord’s property.  If Subtenant is not in monetary default or material nonmonetary

default (beyond any applicable notice and opportunity to cure as to such

nonmonetary default) hereunder as of the last day of the Term, the provisions

of the Bill of Sale attached hereto as Exhibit D shall become effective as of

the last day of the Term as to all particular FF&E which Subtenant has

notified Sublandlord at least forty-five (45) days prior thereto shall be

included in the Bill of Sale.  In

confirmation thereof Sublandlord shall execute and deliver the Bill of Sale to

Subtenant as to the particular FF&E to be so included in the Bill of

Sale.  If Subtenant does not timely give

such notice, none of the

FF&E shall be conveyed to Subtenant and included in the Bill of Sale.

 

3.5                                 It

is understood that notwithstanding the provisions of Section 2.1 hereof

incorporating provisions of Sections 7.4, 9.2 and 9.3 of the Overlease into this

Sublease, to the extent such incorporated provisions relate to the Special

Equipment and FF&E, the provisions of this Section 3 shall govern and

control with respect to the Special Equipment and FF&E in the event of any

inconsistency with such incorporated provisions.

 

3.6                                 It

is understood and agreed that Subtenant shall have no obligation to maintain,

repair, replace or remove any Special Equipment or FF&E except as expressly

provided in this Sublease.

 

4.                                       Additional

Rent.

 

4.1                                 (a)                                  In

the event any additional rent or other amounts are payable with respect to any

time period falling within the term of this Sublease which are attributable to

the provisions of Sections 5.3 and 5.4, as amended, of the Overlease (such

additional rent payable by Sublandlord pursuant to Sections 5.3 and 5.4, as

amended, of the Overlease being hereinafter called “Escalation Rent”) then

Subtenant shall pay as additional rent pursuant to this Sublease an amount

equal to the applicable Subtenant’s Proportionate Share of Escalation

Rent.  At any time after receipt by

Sublandlord of any statement for any Escalation Rent, or if Sublandlord is at

any time obligated to pay any Escalation Rent, Sublandlord may deliver to

Subtenant a statement with respect to the payment of Subtenant’s Proportionate

Share of the Escalation Rent (which may be Overlandlord’s statement) and,

within twenty (20) days after delivery of such statement, Subtenant shall pay

to Sublandlord additional rent determined as aforesaid in this Section 4.1.

 

(b)                                 Sublandlord

shall promptly deliver to Subtenant a copy of any annual statement received

from Overlandlord and such additional back up documentation thereof as

Subtenant may reasonably request that Sublandlord has received or has a right

to obtain from Overlandlord pursuant to the Overlease.  If an annual statement is furnished by

Overlandlord to Sublandlord which shows that there has been an overpayment by

Subtenant of Escalation Rent or if Overlandlord shall notify Sublandlord that

Sublandlord is entitled to a credit against subsequent rent due to a refund of

Taxes or Operating Expense as to which Subtenant paid Escalation Rent, and if

Overlandlord shall actually give Sublandlord credit therefor under the

Overlease, Sublandlord shall permit Subtenant to credit the amount of such

overpayment or Subtenant’s portion of such tax refund credit against the next

subsequent rent payments under this Sublease. 

After the termination of this Sublease and the payment to Sublandlord of

the balance, if any, of all rent due hereunder, Sublandlord shall promptly pay

to Subtenant the

 

14

 

amount of any such credit not previously applied by Subtenant.  In the event that any Escalation Rent is due

under the Overlease with respect to any period that includes any period that

follows the Sublease Expiration Date, Subtenant’s obligations hereunder on

account of such Escalation Rent shall be appropriately prorated.

 

(c)                                  Sublandlord

shall be under no obligation to audit, challenge, object to or contest any such

statement, any allocations or determinations made by Overlandlord pursuant to

such Sections 5.3 and 5.4, or any tax assessment of the Building, although

Sublandlord may do so in its sole discretion. 

Notwithstanding the foregoing, if Subtenant shall within the time period

permitted by the Overlease request Sublandlord to do so, Sublandlord shall

diligently exercise such rights in its commercially reasonable judgment or

permit Subtenant to do so pursuant to the provisions of Section 2.5(d).  In the event of an overpayment of Escalation

Rent, Sublandlord shall promptly notify Subtenant thereof, and if Overlandlord

has actually credited Sublandlord therefor under the Overlease, Sublandlord

shall permit Subtenant to credit the amount of such overpayment, but less the

applicable Subtenant’s Proportionate Share of all reasonable third party costs

and expenses incurred by Sublandlord in connection with such dispute (to the

extent not reimbursed by Overlandlord to Sublandlord) against the next subsequent

rent payments under this Sublease. 

After the termination of this Sublease and the payment to Sublandlord of

the balance, if any, of all rent due hereunder, Sublandlord shall promptly pay

to Subtenant the amount of any credit not previously applied by Subtenant.

 

(d)                                 Sublandlord

has furnished Subtenant with a copy of Overlandlord’s current Escalation Rent

bill for the period ending March 31,

2002.

 

(e)                                  Subtenant’s

and Sublandlord’s liability for such amounts shall survive the expiration of

the Sublease Term.

 

5.                                       Broker.

 

5.1                                 Subtenant

and Sublandlord each covenants, represents and warrants that it has had no

dealings or communications with any broker or agent in connection with the

consummation of this Sublease other than TC Midlantic, Inc. and KLNB (which is

representing Sublandlord), and Blue & Obrecht (which is representing

Subtenant), and Subtenant and Sublandlord each covenants and agrees to pay,

hold harmless and indemnify the other from and against any and all cost,

expense (including reasonable attorneys’ fees) or liability for any

compensation, commissions or charges claimed by any broker or agent other than

the brokers above mentioned with respect to this Sublease or the negotiation

thereof with which the party making such representation has dealt.  Sublandlord shall pay commission to said

named brokers pursuant to separate agreements.

 

6.                                       Notices.

 

6.1                                 Any

notice, demand or communication which, under the terms of this Sublease or

under any statute or municipal regulation must or may be given or made by the

parties hereto, shall be in writing and given or made by mailing the same by

registered or certified mail, return receipt requested, addressed to the party

for whom intended at its address as aforesaid, except that, after the Sublease

Commencement Date, Subtenant’s address shall be deemed to be the

 

15

 

Building unless Subtenant shall give notice to the contrary and that a

copy of all notices shall be sent to Richard Rubin, Esq., Neuberger, Quinn, Gielen,

Rubin & Gibber, 1 South Street, 27th Floor, Baltimore, Maryland

21202.  Either party, however, may

designate such new or other address to which such notices, demands or

communications thereafter shall be given, made or mailed by notice given in the

manner prescribed herein.  Any such

notice, demand or communication shall be deemed given or served, as the case

may be, on the date of receipt or if receipt is refused, on the date so

refused.

 

7.                                       End

of Sublease Term.

 

At the expiration

or earlier termination of this Sublease for any reason, Subtenant shall

thereupon restore the Subleased Premises to the condition as required by

Section 9.3 of the Overlease as incorporated in this Sublease, and shall

surrender and deliver up the Subleased Premises, remove all personal property

and trade fixtures therefrom installed

by Subtenant in the Subleased Premises and the FF&E which is to be

included in the Bill of Sale pursuant to Section 3.4 hereof, as well as remove

all of the Special Equipment which is to be included in the Bill of Sale

pursuant to Section 3.3(d) hereof and which FF&E and/or Special Equipment

Sublandlord shall be required to remove pursuant to the Overlease upon the

expiration or earlier termination of the term of the Overlease, and leave the

Subleased Premises “broom clean”, in good condition and repair, reasonable wear

and tear and damage by fire or other casualty and condemnation excepted.

 

8.                                       Damage

or Destruction.

 

8.1                                 If

the Subleased Premises or the Building or any portion thereof are damaged or

destroyed by fire or other casualty covered by Overlandlord’s fire and extended

coverage insurance policy, Sublandlord shall notify Subtenant of Sublandlord’s

receipt of Overlandlord’s good faith completion date to repair and restore such

damage or destruction pursuant to Section 10.10 of the Overlease .  In the event such date is more than 240 days

after the date of the damage, the Overlease provides that Subtenant shall have

ten (10) days from the date of such notice to notify Sublandlord in writing whether

it wishes to terminate this Sublease, whereupon this Sublease shall terminate

thirty (30) days following such election. 

In the event (i) Overlandlord’s good faith completion date is less than

240 days after the date of the damage, or (ii) such good faith completion date

is more than 240 days after the date of the damage and neither Overlandlord nor

Landlord elects to terminate the Overlease within the notice period provided in

Overlease, then (if Subtenant has not terminated this Sublease), the Overlease

provides that Overlandlord shall commence repair or restoration as soon as

practicable and shall diligently pursue such repair and restoration to

completion.  Notwithstanding the

foregoing, however, Overlandlord shall have no obligation to repair any damage

to, or restore, Sublandlord’s or Subtenant’s property located on the

Premises.  The Overlease provides that

Overlandlord shall pay the cost of repair of any damage or destruction of the

Building or the Premises caused by the negligence or willful misconduct of

Overlandlord or its agents.  Subtenant

shall pay the reasonable cost of repair of any damage or destruction of the

Premises, except to the extent caused by defects in construction of the

Building or the negligence or willful misconduct of Overlandlord or its

agents.  Subtenant shall pay the

reasonable cost of repair of any damage or destruction of the Building caused

by the negligence or willful misconduct of Subtenants or its agents.  The Overlease provides that the costs of

Overlandlord’s repair of the

 

16

 

Premises or the Building shall include a reasonable overhead and profit

charge by Overlandlord, if the damage is the result of Subtenant’s negligence

or willful act.  Subtenant’s obligation to

pay the cost of repairs for damage or destruction to the Premises or the

Building shall be reduced by any insurance proceeds payable to Overlandlord for

such damage or destruction, but only to the extent such insurance provides for

a waiver of subrogation which permits such reduction of Subtenant’s

obligations.  Subtenant shall vacate

such portion of the Premises for such period of time as Overlandlord reasonably

requires to enable Overlandlord to repair the Premises or the Building.

 

8.2                                 Pursuant

to the Overlease, Overlandlord shall not have any obligation to repair,

reconstruct, or restore the Premises during the last twelve (12) months of the

Term of the Overlease, as a result of any damage to or destruction of the

Premises if the cost of such repair, reconstruction or restoration, as

reasonably estimated by Overlandlord, exceeds the portion of the Basic Annual

Rental under the Overlease due for the remainder of the Term of the

Overlease.  If Overlandlord so elects

not to repair the Premises, Subtenant may elect to terminate this Sublease by

written notice to Sublandlord within twenty (20) days of receipt of

Overlandlord’s notification of such election. 

If Subtenant elects to terminate this Sublease as provided above, this

Sublease shall terminate twenty (20) days following the election by Subtenant

to terminate this Sublease.  If

Subtenant does not elect to terminate this Sublease within such twenty (20) day

period, the rent and other expenses payable by Subtenant shall not abate, and

pursuant to the Overlease, Overlandlord may repair the Premises at

Sublandlord’s cost and expense, which cost and expense shall be paid by

Subtenant as additional rent under this Sublease, and Subtenant shall deposit

with Sublandlord in advance an amount estimated by Overlandlord as the cost of

such repair.

 

9.                                       [Intentionally

Omitted]

 

10.                                 Assignment

and Sublet.

 

10.1                           Subtenant

shall not, whether voluntarily, involuntarily or by operation of law, in any

manner or by reason of any act or omission on the part of Subtenant or any

party acting by or through Subtenant (w) assign or otherwise transfer this

Sublease or the term or estate hereby granted, nor (x) sublet or underlet all

or any part of the Subleased Premises, nor (y) permit the Subleased Premises or

any desk space therein to be occupied by any person(s), nor (z) mortgage,

pledge or encumber this Sublease or all or part of the Subleased Premises

without first obtaining:

 

(i)                                     Overlandlord’s

consent and all other required consents to such assignment or subletting as set

forth in and pursuant to the terms of the Overlease, after Subtenant shall have

complied with the provisions of the Overlease (provided, however, nothing

herein shall be deemed to detract from the provisions of Sections 2.5(c) and

(d) hereof), and

 

(ii)                                  Sublandlord’s

consent in accordance with the terms of this Sublease.

 

If Subtenant is a

corporation, partnership, or limited liability entity, then the transfer in one

or more transactions of 50% or more of the voting stock, membership or equity

interest of Subtenant, whether accomplished by merger, operation of law or

otherwise, shall constitute an

 

17

 

assignment for purposes

of this paragraph, requiring that Subtenant 

obtain the consent of the Sublandlord.

 

10.2                           Notwithstanding

anything hereinbefore contained in Section 10.1 hereof, in the event

Subtenant desires Sublandlord’s consent to an assignment of this Sublease or an

underletting of all of the Subleased Premises, Subtenant by notice in writing

shall notify Sublandlord of the name of the proposed assignee or undertenant,

furnish such information as to the proposed assignee’s or undertenant’s

financial responsibility and standing as Sublandlord may reasonably require,

and furnish Sublandlord with a copy of the proposed assignment or underlease.

 

10.3                           Sublandlord

covenants not to unreasonably withhold or delay its consent to such proposed

assignment or underletting by Subtenant of the Subleased Premises to the

proposed assignee or undertenant on said covenants, agreements, terms,

provisions and conditions set forth in the notice to Sublandlord referred to in

Section 10.2 hereof; provided, however, that Sublandlord shall not in any event

be obligated to consent to any such proposed assignment or underletting unless

there shall be no default by Subtenant (beyond any applicable notice and/or

cure period) under any of the terms, covenants and conditions of this Sublease

at the time that Sublandlord’s consent to any such assignment or underletting

is requested and on the effective date of the assignment or the proposed

underlease.

 

10.4                           All

reasonable third party costs and expenses of Sublandlord incurred in connection

with any actual or proposed assignment or underletting, including, without

limitation, reasonable attorneys fees and disbursements, and any amounts

payable under the Overlease as a result of such actual or proposed assignment

or underletting, shall be paid by Subtenant, as additional rent hereunder,

within twenty (20) days after demand.

 

10.5                           Subtenant

and such assignee shall be jointly and severally liable for all obligations to

be performed thereafter under this Sublease; and

 

10.6                           Any

such sublessee of Subtenant shall have the right to further sublet the

Subleased Premises and/or to assign its sublease of the Subleased Premises and

any such assignee of Subtenant shall have the further right to assign this

Sublease, subject to the provisions of this Sublease as if such subletting or

assignment were made by Subtenant.

 

10.7                           Sublandlord

shall be entitled to receive from Subtenant (as and when received by Subtenant)

as an item of additional rent one hundred percent (100%) of all amounts

received by Subtenant from any sub-subtenant or assignee in excess of the

amounts payable by Subtenant to Sublandlord hereunder (hereinafter the

“Transfer Premium”). The Transfer Premium shall be reduced by the reasonable

transaction costs  actually paid by Subtenant in order to assign this Sublease

or to sub-sublet a portion of the Subleased Premises, provided that Subtenant provides

Sublandlord with a detailed breakdown of all transaction costs associated with

such assignment or subletting at the time Subtenant obtains Sublandlord’s

consent and Sublandlord consents to such costs, which consent shall not be

unreasonably withheld, conditioned or delayed (Sublandlord acknowledges that

the following may constitute transaction costs: work allowances, alteration

expenses and other expenses reasonably incurred by Subtenant).  “Transfer Premium” shall mean all Fixed

Rent, Escalation Rent or other consideration of any type

 

18

 

whatsoever payable by the assignee or sub-subtenant in excess of the

Fixed Rent and Escalation Rent payable by Subtenant under this Sublease.

Transfer Premium shall also include, but not be limited to, key money and bonus

money paid by the assignee or sub-subtenant to Subtenant in connection with

such assignment or sub-subletting, and any payment in excess of fair market

value for services rendered by Subtenant to the assignee or sub-subtenant or

for physical assets, fixtures, inventory, equipment, or furniture transferred

by Subtenant to the assignee or sub-subtenant in connection with

therewith.  For purposes of calculating the

Transfer Premium, expenses will be deducted from any assignment proceeds or the

first to be paid sublet rents.

 

11.                                 [Intentionally

Omitted]

 

12.                                 Quiet

Enjoyment.

 

12.1                           So long

as Subtenant pays all of the rent and additional rent due under this Sublease

and performs all of Subtenant’s other obligations hereunder, Subtenant shall

peacefully and quietly have, hold and enjoy the Subleased Premises during the

term of this Sublease, without hindrance or molestation by Sub-landlord or by

anyone claiming by or through Sublandlord, subject, however, to the terms,

provisions and obligations of this Sublease and the Overlease.

 

13.                                 Indemnity

and Insurance.

 

13.1                           Subtenant

hereby indemnifies and agrees to hold Sublandlord harmless from and against any

and all claims (including, without limitation, claims of Overlandlord against

Sublandlord), losses or damages, including, without limitation, attorneys’ fees

and disbursements, resulting from or arising out of (a) Subtenant’s failure to

perform any of the terms, covenants, conditions or agreements contained in or

incorporated into this Sublease (or any consents hereto) which, by the terms of

this Sublease (or such consents), Subtenant is obligated to perform, and (b)

any other acts or omissions of Subtenant or Subtenant’s employees, invitees,

agents or other representatives, and (c) any occurrence in or about the

Premises; and all amounts payable by Subtenant to Sublandlord on account of

such indemnity shall be deemed to be rent hereunder and shall be payable upon

demand.

 

13.2                           Subtenant

shall, at its sole cost and expense, comply with all of the insurance

provisions of the Overlease which are binding on Sublandlord to the extent

applicable to Subtenant and/or the Subleased Premises, and Subtenant shall name

Sublandlord as an additional insured as well as each of those parties set forth

in the Overlease as required to be named as additional insureds.  Upon request, Subtenant shall furnish

Sublandlord with all certificates required to be delivered to Overlandlord

pursuant to the Overlease.

 

13.3                           Sublandlord

hereby indemnifies and agrees to hold Subtenant harmless from and against any

and all claims, losses or damages, including, without limitation, reasonable

attorneys’ fees and disbursements, resulting from or arising out of (a)

Sublandlord’s failure to perform any of the terms, covenants, conditions or

agreements contained in or incorporated into this Sublease 

 

which, by the terms of this Sublease, Sublandlord is obligated to

perform, except for defaults arising out of the acts or omissions of Subtenant,

its agents, contractors, employees, sublessees or licensees, and (b) any

willful misconduct or gross negligence of Sublandlord, its employees,

 

19

 

agents, contractors or invitees, provided, however, Subtenant acknowledges

and agrees that Sublandlord shall in no event be liable for special,

consequential, indirect or punitive damages in connection with such indemnity.

 

14.                                 Miscellaneous.

 

14.1                           This

Sublease may not be changed orally, but only by an agreement in writing signed

by the party against whom enforcement of any waiver, change, modification or

discharge is sought.

 

14.2                           This

Sublease shall not be binding upon Sublandlord unless and until it is signed by

Sublandlord and delivered to Subtenant. 

This Section 14.2 shall not be deemed to modify the provisions of

Section 1.6 hereof.

 

14.3                           This

Sublease constitutes the entire agreement between the parties and all

representations and understandings have been merged herein, including, without

limitation, the License Agreement. This Sublease shall inure to the benefit of

all of the parties hereto, their successors and (subject to the provisions

hereof) their assigns.

 

[REMAINDER

OF PAGE LEFT INTENTIONALLY BLANK]

 

20

 

14.4                           Neither

this Sublease nor a memorandum thereof may be recorded by the Subtenant.

 

14.5                           If any

litigation shall occur between the parties as to this Sublease, the prevailing

party shall, upon demand reimburse the other party for such party’s reasonable,

out-of-pocket attorneys’ fees and disbursements and court costs.

 

14.6                           Any

reference in this Sublease, whether expressly or by incorporation, to

attorneys’ fees of Sublandlord, shall be deemed to include Subtenant’s in-house

counsel whose fees shall be determined at market rates.

 

14.7                           This

Sublease may be executed in multiple counterparts, all of which taken together

shall constitute the same instrument.

IN WITNESS WHEREOF, the parties have hereunto set

their hands and seals as of the day and year first above written.

 

	

  ATTEST:

  	

   

  
	

   

  	

  Sublandlord

  
	

   

  	

  DEUTSCHE BANK

  SECURITIES INC.

  
	

   

  	

   

  
	

   

  	

   

  	

  By: 

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

  ATTEST:

  	

   

  
	

   

  	

  Subtenant

  
	

   

  	

  TESSCO

  TECHNOLOGIES INCORPORATED

  
	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
									

 

CONSENT OF OVERLANDLORD

 

ATRIUM BUILDING LLC,

as Overlandlord under the Overlease, hereby executes this Sublease for the

purpose of consenting to the Sublease to Subtenant pursuant to this Sublease,

provided such consent shall not release Sublandlord from its liability as

Tenant under the Overlease nor waive the necessity for obtaining the consent of

Overlandlord to any further subletting or assignment of the Overlease as and to

the extent required by the Overlease.

 

	

   

  	

  ATRIUM BUILDING LLC

  
	

   

  	

   

  
	

   

  	

   

  
	

  Date:

  	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  
	

   

  	

   

  	

  Title:

  
						

 

21Exhibit 10.6

 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

 

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT is entered

into as of the 3rd day of December, between ANTHONY J. GIOIA (“Executive”), and

TULLY’S COFFEE CORPORATION, a Washington corporation (“Tully’s”).

 

RECITALS

 

A.            Tully’s

and Executive are parties to that certain Tully’s Coffee Corporation Employment

Agreement dated May 13, 2002 (the “Original Employment Agreement”), setting

forth the terms and conditions of Executive’s employment with Tully’s.

 

B.            The

parties desire to amend the Original Employment Agreement to reflect certain

changes in the terms and conditions of Executive’s employment with Tully’s.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, and

for other good and valuable consideration, the receipt and sufficiency of which

is hereby acknowledged, the parties hereto agree as follows:

 

1)            Definitions.           All capitalized terms

used herein and not otherwise defined shall have the meanings assigned to such

terms in the Original Employment Agreement.

 

2)            Amendments

to Original Employment Agreement.  Effective as of the date set forth above,

the Original Employment Agreement is hereby amended as follows:

 

2.1           A

new Section 3(i) is hereby added to the Original Employment Agreement reading as

follows:

 

i.              Housing

Allowance.   Commencing

on December 1, 2002 and continuing on December 1, 2003 and December 2004

(provided that this Agreement is still in effect on such dates), Executive

shall be paid an annual housing allowance of $10,000  (the “Housing Allowance”). 

Each such payment of the Housing Allowance shall be considered a

prepayment for the twelve month period following such payment date.  In the event that this Agreement is

terminated either (a) for cause by Tully’s under Section 5(c), or (ii)

voluntarily by Executive under Section 5(e), Executive shall be obligated to

repay to Tully’s a pro-rated portion of the Housing Allowance covering the

unearned portion of the Housing Allowance.

 

 

1

 

2.2           Section

6(b) of the Original Employment Agreement is hereby amended and restated to

read as follows:

 

b.             Termination

of Executive’s Employment Without Cause or By Executive for Good Reason.

 

                (1)  In the

event that, during the twelve-month period ending on the first anniversary of

the Commencement Date,  Executive’s

employment with Tully’s is terminated by Tully’s Without Cause in accordance

with Section 5(d) or by Executive for Good Reason in accordance with Section

5(f),  Executive shall be entitled

to receive (a) Executive’s first year Base Salary for an additional one-year

period following the termination date of Executive’s employment, with such Base

Salary to paid out monthly in accordance with Tully’s payroll practices as in

effect from time to time; (b) full vesting with respect to 225,000 of the Grant

1 Stock Options; and (c) payment by Tully’s to Executive of $100,000 less the

aggregate amount of all Housing Allowance payments made under Section 3(i).

 

                (2)  In the

event that, during the twelve-month period ending on the second anniversary of

the Commencement Date, Executive’s employment with Tully’s is terminated by

Tully’s Without Cause in accordance with Section 5(d) or by Executive

for Good Reason in accordance with Section 5(f),  Executive shall be entitled to receive (a)

Executive’s second year Base Salary for an additional fifteen months following

the termination date of Executive’s employment, with such Base Salary to be

paid out monthly in accordance with Tully’s payroll practices as in effect from

time to time; (b) full vesting with respect to an aggregate total of 300,000 of

the Grant 1 Stock Options; and (c) 

payment by Tully’s to Executive of $100,000 less the aggregate amount of

all Housing Allowance payments made under Section 3(i).

 

                (3)  In the

event that, Executive’s employment with Tully’s is terminated by Tully’s

Without Cause in accordance with Section 5(d) or by Executive for Good

Reason in accordance with Section 5(f) at any time after the second

anniversary of the Commencement Date, Executive shall be entitled to receive

(a) Executive’s Base Salary (in the year during which the termination occurs)

for an additional eighteen months following the termination date of Executive’s

employment, with such Base Salary to be paid out monthly in accordance with

Tully’s payroll practices as in effect from time to time; (b) ratable vesting

(based on the portion of the third year worked by the Executive prior to the

effective date of such termination) of the remaining 150,000 unvested Grant 1

Stock Options, and (c)  payment by

Tully’s to Executive of $100,000 less the aggregate amount of all Housing

Allowance payments made under Section 3(i).

 

 

2

 

The payments and vesting rights described in Sections

6(b) (1)-(3) above are conditioned upon Executive’s execution and delivery

to Tully’s of a full and complete written release (the “Release”) of any and

all other claims the Executive may have against the Company in form and

substance acceptable to the Company.  If

Executive fails to deliver the Release in a timely manner, Tully’s shall have

no obligation to make the payments or grant early vesting as to any of the

Stock Options as described in Sections 6(b)(1)-(3) above.

 

2.2           Section

7 of the Original Employment Agreement is hereby amended to add the following

additional sentences:

 

In the event of a Change in Control, Executive

shall also be entitled to receive a one-time payment of $100,000 less the

aggregate amount of all Housing Allowance payments made under Section 3(i) (the

“Change in Control Payment”).  If a  Change in Control Payment is made, Tully’s

shall (a) have no further obligation to make any such payment on any Change in

Control occurring thereafter, and (b) be relieved of any obligation to make the

payments described in Sections’ 6(b)(1)(c), 6(b)(2)(c) and 6(b)(3)(c) above.

 

2.3           Section

8 of the Original Employment Agreement is hereby amended and restated to read

as follows:

 

8.             Relocation.   Tully’s shall

reimburse Executive for 100% of the normal closing costs and expenses (but not

including any loss on sale or the payment of the actual sales purchase price)

incurred in connection with (i) the sale of Executive’s current personal

residence in Phoenix, Arizona, and (2) the purchase by Executive of a personal

residence in Seattle, Washington. 

Tully’s shall also reimburse Executive for (a) 100% of Executive’s

actual temporary residential living expenses in Seattle, Washington (not to

exceed $2,500 per month) for up to but not exceeding the earlier of six months

after the Commencement Date or the date upon which Executive closes on the

purchase of a personal residence in Seattle, Washington; (b) the cost of moving

two personal vehicles from Phoenix, Arizona to Seattle, Washington; and (c) the

cost of up to two round trip tickets for each of Executive and his spouse

between Phoenix, Arizona and Seattle, Washington  related to Executive’s initial move to Seattle.

 

 

3

 

 

3.             Remainder of Original Employment

Agreement Remains in Full Force and Effect. 

Except as specifically amended by this First

Amendment, the Original Employment Agreement shall remain in full force and

effect.

 

4.             Miscellaneous.

 

4.1          Governing

Law.  This First Amendment shall be governed by, construed and enforced

in accordance with the internal laws of the state of Washington, without giving

effect to principles and provisions thereof relating to conflict or choice of

laws.

4.2          Attorneys’

Fees.  In the event that suit is brought to interpret or enforce any

term or provision of this First Amendment, the prevailing party in any such

suit or proceeding shall, in addition to any other relief to which such party

may be entitled, be awarded its costs and attorneys’ fees reasonably and actually

incurred.

 

4.3          Interpretation.  This First Amendment is the

result of negotiations between the parties and, accordingly, shall not be

construed against for or against either party regardless of which party drafted

this First Amendment or any portion thereof.

 

4.4          Counterparts.  This First Amendment may be

executed in counterparts, each of which shall be deemed an original, but all of

which together shall constitute one and the same instrument.

 

 

IN WITNESS WHEREOF, the parties have hereunto set

their hands the day and year first set forth above.

 

 

	

  EXECUTIVE:

  	

   

  	

  TULLY’S:

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  TULLY’S COFFEE CORPORATION

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  /s/ Anthony J. Gioia

  	

   

  	

  By

  	

  /s/ Tom T. O’Keefe

  
	

  Anthony J. Gioia

  	

   

  	

  Tom T. O’Keefe

  Its Chairman of the Board of Directors

  
					

 

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}]]