EXHIBIT 10.31
SUBLEASE
THIS SUBLEASE ("Sublease") is made as of June 21, 2001 , by Network
Engines, Inc. ("Sublandlord"), a Delaware corporation with principal offices at
00 Xxx Xxxx, Xxxxxx XX 00000 and Techmar Communications, Inc., a Delaware
corporation ("Subtenant").
BACKGROUND:
A. New Boston Battery March Limited Partnership, predecessor in interest
to Xxx Road Building LLC, as Landlord ("Prime Landlord"), and Sublandlord, as
Tenant, entered into a Lease dated 19 October 1999 (the "Original Lease"), as
amended by a First Amendment to Lease Agreement, dated February 1, 2000 (the
"First Amendment"), as further amended by a Second Amendment to Lease Agreement,
dated June 1, 2000, (the "Second Amendment,") and as further amended by a Third
Amendment to Lease Agreement, dated September 14 , 2000, (the "Third Amendment,"
and together with the Original Lease, the First Amendment and the Second
Amendment, the "Prime Lease," a copy of which Prime Lease, not including the
First Amendment or the Third Amendment, is attached hereto as Exhibit B),
regarding certain premises ("Prime Lease Premises") in the buildings described
in the Prime Lease as being located at 15 and 00 Xxx Xxxx, Xxxxxx Xxxxxxxxxxxxx,
all as described in the Prime Lease. (15 Xxx Road has subsequently been
renumbered by the USPS as 00 Xxx Xxxx.)
B. Sublandlord and Subtenant wish to enter into a sublease for a portion
of the Prime Lease Premises located at 00 Xxx Xxxx, and consisting of
approximately 23,159 rentable square feet as depicted on Exhibit A attached
hereto, (the "Sublease Premises"), all upon the terms and conditions set forth
below.
AGREEMENT:
1. Sublease. Subtenant subleases from Sublandlord, and Sublandlord
subleases to Subtenant, the Sublease Premises upon the terms and conditions set
forth below.
2. Sublease Term. The term of this Sublease ("Sublease Term") will
commence on the latter to occur of (a) Xxxxxx 00, 0000, (x) delivery of the
Sublease Premises to Subtenant or (c) delivery of written notice from the Prime
Landlord of Prime Landlord's consent to this Sublease ("Commencement Date"), and
will expire on March 30, 2005.
3. Use. Subtenant shall use the Sublease Premises only as allowed in
Section II ("Use") of the Prime Lease, and for no other purpose without the
written consent of both Prime Landlord and Sublandlord, which consent, with
regard to the Prime Landlord, may be withheld at its discretion and with regard
to the Sublandlord, will not be unreasonably withheld.
4. "As Is" Sublease; Alterations. Subtenant accepts the Sublease Premises,
in "as is" condition, on the date of this Sublease, "with all faults". Subtenant
will pay for the installation and cost of any and all improvements, alterations
or other work required on or to the Sublease Premises or on or to any other
portion of the property and/or building of which the
Sublease Premises are a part as a result of Subtenant's use of the Sublease
Premises. Subtenant shall make or install no structural improvements,
alterations or work on or to the Sublease Premises or on or to the property
and/or building of which the Sublease Premises are a part without the prior
written consent of Sublandlord (which consent shall not be unreasonably
withheld) and Prime Landlord (to the extent such consent is required under the
Prime Lease). Subtenant shall be permitted to make cosmetic, decorative
improvements to the Sublease Premises that do not affect the building's
structure or its systems, if and as allowed under the Prime Lease.
5. Rent; Late Charges. Subtenant will pay to Sublandlord monthly base rent
("Base Rent") for the Sublease Premises in advance, without abatement, deduction
or setoff, on the Commencement Date and on the first day of each calendar month
thereafter during the Sublease Term, as follows:
---------------------------------------------------------------------------
Period Annually Per Monthly Annual
Square Foot
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Commencement date -- $12.50 $24,123.96 $289,487.50
3/31/02
---------------------------------------------------------------------------
4/01/02 - 3/31/03 $12.50 $24,123.96 $289,487.50
---------------------------------------------------------------------------
4/01/03 - 3/31/04 $13.00 $25,088.92 $301,067.00
---------------------------------------------------------------------------
4/01/04 - 3/31/05 $13.00 $25,088.92 $301,067.00
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Subtenant will also pay Sublandlord, as additional rent ("Additional Rent") and
in the manner set forth in the Prime Lease, that portion of "Tenant's Taxes and
Operating Cost Excess" (as set forth in the Prime Lease) attributable to the
Subleased Premises. Sublandlord represents and warrants to Subtenant that for
purposes of this Sublease, "Tenant's Building Proportionate Share" (as defined
in the Prime Lease) for the Sublease Premises is 17.26%, and "Tenant's Property
Proportionate Share" (as defined in the Prime Lease) for the Subleased Premises
is 8.43%, each percentage calculated as provided in the Prime Lease.
Sublandlord shall promptly forward to Subtenant any notice from Landlord
under Section XI of the Prime Lease. Sublandlord shall, upon reasonable request
and at Subtenant's cost and expense, exercise Sublandlord's audit rights under
Section XI(i) of the Prime Lease with respect to the Subleased Premises, for the
benefit of Subtenant.
In the event that the Rent is not paid within ten (10) days after the due
date, Sublandlord shall assess and Subtenant shall pay a late charge in an
amount equal to interest at the rate of prime rate plus two percent (2%) on the
unpaid balance from the date said Rent became due. All other charges that
Subtenant is required to pay hereunder, together with all interest and penalties
that may accrue thereon, shall be deemed to be "Additional Rent " and in the
event of non-payment thereof by Subtenant, Sublandlord shall have all the rights
and remedies with respect thereto as would accrue to Landlord for non-payment of
Rent under the Prime Lease. Subtenant shall pay the Rent and Additional Rent
without demand or notice and without deduction, abatement, counterclaim, or
set-off, except as expressly set forth herein to the Sublandlord at 00 Xxx Xxxx,
Xxxxxx XX, 00000, or at such other place as designated from time to time by
Sublandlord in writing. Acceptance of any late charge shall not constitute a
waiver of Subtenant's default with respect to the overdue amount, nor prevent
Sublandlord from exercising any of the other rights and remedies available to
Sublandlord.
6. Security Deposit. Receipt of twenty four thousand, one hundred
twenty-three dollars and ninety six cents ($24,123.96) is hereby acknowledged by
Sublandlord as security for Subtenant's payment and performance hereunder. The
Security Deposit shall be delivered to Sublandlord and shall be held throughout
the term hereof as security for the faithful performance by Subtenant of each
and every term, condition, covenant and provision of this Sublease and the Prime
Lease. Sublandlord may apply all or any portion of the Security Deposit to
repair damage to the Premises or to the restoration thereof (or to reimburse the
Prime Landlord for any of the foregoing) or to any Rent and Additional Rent,
including Taxes and Operating Costs which may be due from Subtenant to
Sublandlord. In the event that Sublandlord shall so apply all or any portion of
the said security deposit, Subtenant shall immediately upon notice, restore the
same to its full amount as required hereunder, with immediately available funds.
If Subtenant has performed all of the terms, covenants and conditions of this
Sublease throughout the Sublease Term, Sublandlord will, within 30 days after
Subtenant vacates the Sublease Premises, return to Subtenant the amount paid as
a security deposit, without interest, after first deducting any sums owing to
Sublandlord under the terms of this Sublease.
7. Performance of Prime Lease by Subtenant. Except as otherwise set forth
in this Sublease, Subtenant assumes and agrees to keep, obey and perform all of
the terms, covenants and conditions of Sublandlord as Tenant under the Prime
Lease, (not including the First Amendment or the Third Amendment), with respect
to the Sublease Premises. Subtenant shall be entitled to all rights afforded to
Sublandlord as Tenant under the Prime Lease, except that Subtenant shall not
(and Subtenant agrees that it has no right or authority to) exercise any of the
rights contained in Section V, (Construction and Preparation of the Premises),
Section XLIII (Brokerage), Section XLV (Security Deposit), Section XLVIII (Right
of First Offer) and Section XLX (Renewal Option).
8. Subtenant's Rights as to Prime Landlord. Sublandlord shall not be
liable for any nonperformance of or noncompliance with or breach or failure to
observe any term, covenant or condition of the Prime Lease upon Prime Landlord's
part to be kept, observed, performed or complied with, or for any delay or
interruption in Prime Landlord's performing its obligations thereunder, provided
that Sublandlord shall cooperate with Subtenant in assisting Subtenant in
enforcing the terms of the Prime Lease, to the extent provided below.
Sublandlord assigns unto Subtenant, for so long as this Sublease shall be in
force and effect, any and all rights and benefits accruing to the benefit of
Sublandlord under the terms, covenants and conditions of the Prime Lease (except
as specifically stated in Section 7 hereof) and any causes of action which
Sublandlord may have against Prime Landlord with respect to the Sublease
Premises due to defaults by Prime Landlord under the Prime Lease. Sublandlord
will cooperate with and join with Subtenant, including, upon reasonable request,
bringing an action against the Prime Landlord in its own name to enforce the
provisions of the Prime Lease, provided that such participation and/or action
shall be without cost or expense to Sublandlord.
9. Insurance; Waivers. Subtenant will, during the Sublease Term,
continuously maintain commercial general liability insurance as required under
the Prime Lease, which
insurance policy shall name Landlord and Sublandlord as additional insured
parties, and a certificate thereof acceptable to Sublandlord shall be delivered
to Sublandlord prior to the delivery of the Sublease Premises to Subtenant.
Subtenant shall keep deposited with the Sublandlord copies of all policies of
insurance, or certificates thereof, with endorsements on such policies or
certificates to the effect that such insurance shall not be canceled by the
insurer without at least fifteen days prior notice to Sublandlord. Subtenant
will indemnify, defend and hold harmless Sublandlord and Prime Landlord from,
and shall reimburse Sublandlord and Prime Landlord for, all costs and expenses,
including reasonable attorneys' fees, incurred by Sublandlord and Prime Landlord
in connection with the defense of all claims and demands of third persons,
including but not limited to those for death, personal injuries, or property
damage, arising out of any default of Subtenant in performing or observing any
term, covenant, condition or provision of this Sublease, or out of the use or
occupancy of the Sublease Premises by Subtenant, or out of any of the acts or
omissions of the Subtenant, its agents, representatives, employees, customers,
guests, invitees or other persons who are doing business with Subtenant or who
are at the Sublease Premises with Subtenant's consent. Sublandlord and Subtenant
hereby waive any rights each may have against the other in connection with any
of the damage occasioned to Sublandlord or Subtenant, as the case may be, their
respective property, the Building or its contents, arising from covered causes
of loss for which insurance is carried or required to be carried pursuant to
this Lease. Each party on behalf of their respective insurance companies
insuring their respective property against any such loss, waive any right of
subrogation that it may have against the other party. Sublandlord shall continue
to maintain all insurance required to be maintained by Sublandlord under the
Prime Lease with respect to the Subleased Premises provided however, that the
insurance to be maintained by Subtenant pursuant to this Section 9 shall be
primary as to such insurance of Sublandlord except in the event of any act or
omission of Sublandlord.
10. Assignment and Subletting. Subtenant covenants and agrees that neither
this Sublease nor the term and estate hereby granted, nor any interest herein or
therein, will be assigned, mortgaged, pledged, encumbered or otherwise
transferred, and that neither the Sublease Premises, nor any part thereof will
be encumbered in any manner by reason of any act or omission on the part of
Subtenant or used or occupied, or utilized for desk space or for mailing
privileges, by anyone other than Subtenant, or for any use or purpose other than
as stated herein, or be sublet or offered or advertised for subletting, without
the prior written consent of Sublandlord in every case (which consent shall not
be unreasonably withheld or delayed) and of Prime Landlord (if applicable under
the Prime Lease). If Subtenant shall sublet the Sublease Premises, having first
obtained Sublandlord's consent, at a rental in excess of the Rent due and
payable by Subtenant under the provisions of this Sublease, such excess Rent
(net of any excess due Prime Landlord in accordance with the Prime Lease) shall
be split equally between the Subtenant and the Sublandlord after deduction of
the Subtenant's expenses, it being agreed, however, that Sublandlord shall not
be responsible for any deficiency if Subtenant shall sublet the Sublease
Premises at a rental less than that provided for herein. It is hereby expressly
understood and agreed, however, if Subtenant is a corporation, that the
subletting, assignment, or transfer of this Sublease, and the term and estate
granted, to any corporation into which Subtenant is merged or with which
Subtenant is consolidated, or to any affiliate or acquirer of the stock or
assets of Subtenant, which corporation shall have a net worth at least equal to
that of Subtenant immediately prior to such merger or consolidation (such
corporation being hereinafter called "Assignee"), without the prior written
consent of Sublandlord shall not be deemed to be
prohibited hereby, if, and upon the express condition that, Assignee and
Subtenant shall promptly execute, acknowledge, and deliver to landlord an
agreement in form and substance satisfactory to Sublandlord hereby Assignee
shall agree to be bound by and upon the covenants, agreements, terms, provisions
and conditions set forth in this Sublease on the part of Subtenant to be
performed by whereby Assignee shall expressly agree that the provisions of this
Section 10 shall, notwithstanding such assignment transfer, continue to be
binding upon it with respect to all future assignments and transfers
Notwithstanding any permitted assignment or subletting, Subtenant shall at all
times remain directly, primarily and fully responsible and liable for the
payment of all sums payable under this Sublease and for compliance with all of
its obligations as Subtenant under this Sublease. The listing of any name other
than that of Subtenant whether on the doors of the Sublease Premises or on the
Building directly, or otherwise, shall not operate to vest any right or interest
in this Sublease or in the Sublease Premises or be deemed to be the written
consent of Sublandlord mentioned in this Section 10.
If this Sublease is assigned, or if the Sublease Premises or any part
thereof is sublet or occupies by anybody other than Subtenant, Sublandlord may,
after default by Subtenant, collect Rent from the assignee, subtenant or
occupant, and apply the net amount collected to the Rent herein reserved, but no
such assignment, subletting occupancy or collection shall be deemed a waiver of
this covenant, or the acceptance of the Assignee, subject or occupant as a
tenant, or a release of Subtenant from the further performance by Subtenant of
covenants on the part of Subtenant herein continued. The consent by Sublandlord
to an assignment or subletting shall not in any way be construed to relieve
Subtenant from obtaining the express consent in writing of Sublandlord to any
further assignment or subletting. No assignment, subletting or use of the
Sublease Premises by an affiliate of Subtenant shall affect the purpose for
which the Sublease Premises may be used in accordance with this Sublease or the
Prime Lease.
11. Termination. This Sublease shall terminate at the end of the Sublease
Term hereof. Subtenant will peacefully and quietly vacate and surrender the
Sublease Premises to Sublandlord at the expiration of the Sublease Term, in the
condition called for under the Prime Lease. The existence of this Sublease is
dependent and conditioned upon the continued existence of the Prime Lease, and
in the event of the cancellation or termination of the Prime Lease, this
Sublease automatically shall be terminated; provided, however, that this
provision shall not be deemed to release Sublandlord of liability if the Prime
Lease is canceled or terminated due to a default by Sublandlord as Tenant under
the Prime Lease, which default did not result, in whole or in part, from a
default by Subtenant under this Sublease. Sublandlord agrees not to amend, alter
or modify any of the provisions of the Prime Lease affecting Subtenant, or to
surrender the Prime Lease, without Subtenant's consent, which consent will not
be unreasonably withheld or delayed. Sublandlord shall have no liability to
Subtenant due to the termination of the Prime Lease by reason of any default by
Subtenant under this Sublease.
Sublandlord represents, warrants and covenants that (i) Sublandlord is the
holder of the interest of the Tenant under the Prime Lease, (ii) the Prime Lease
is in full force and effect and, to the best of Sublandlord's knowledge, Prime
Landlord is not in default thereunder, (iii) Sublandlord has received no notice
that it is in default under the Prime Lease nor has Sublandlord any knowledge of
the existence of any condition or the occurrence of any event which, if not
timely acted upon, would result in Sublandlord's default under the Prime Lease,
(iv) nothing in the First Amendment is applicable to this Sublease or adversely
affects
Subtenant's rights hereunder, and (v) Sublandlord shall not suffer or
voluntarily terminate or surrender the Prime Lease.
12. Default. If Subtenant defaults in its obligations under this Sublease,
or if Subtenant commits, causes or allows an "Event of Default" under the Prime
Lease (not including the First Amendment or the Third Amendment) to occur,
Sublandlord shall have all of the same rights and remedies against Subtenant as
would be available to the Prime Landlord against Sublandlord if an Event of
Default occurred under the Prime Lease, as fully as if such rights and remedies
were set forth in this Sublease.
13. Holdover. Notwithstanding any contrary provisions of the Prime Lease,
if Subtenant retains possession of the Sublease Premises or any part thereof
after expiration or earlier termination of the Sublease Term, Subtenant will pay
to Sublandlord rent at 150% of the Base Rent specified in Section 5 hereof, as
well as 150% of Subtenant's Proportionate Share of any Additional Rent, for the
time Subtenant remains in possession and, in addition thereto, will pay
Sublandlord for all other costs or damages that Sublandlord may be liable for to
the Prime Landlord, by reason of Subtenant's retention of possession. The
provisions of this Section do not exclude Sublandlord's rights of re-entry or
any other right hereunder, including without limitation, the right to refuse
150% of monthly rent and instead to remove Subtenant through summary proceedings
for holding over beyond the expiration or earlier termination of the Sublease
Term.
14. Notices. Any notice or demand permitted or required hereunder shall be
deemed given or made if, and shall not be deemed to have been given or made
unless, it is in writing and deposited in the United States mails certified,
return receipt requested, postage prepaid, or deposited cost paid with a
nationally recognized, reputable overnight courier, addressed as follows:
If to Sublandlord: Network Engines, Inc.
00 Xxx Xxxx
Xxxxxx XX 00000
Attn: Chief Financial Officer
If to Subtenant: Techmar Communications, Inc
00 Xxx Xxxx
Xxxxxx, XX 00000
Attn: Xxx Xxxxxxxxxxx
With a copy to: Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Esq.
It is agreed that certified mail shall be conclusively deemed received one day
after it is mailed, postage prepaid, and that an item sent by recognized
overnight courier shall be conclusively deemed received the day it is scheduled
to be delivered. The foregoing addresses may be changed from time to time by
written notice as above provided, which change shall be effective 10 days after
written notice is given. Sublandlord shall promptly deliver to Subtenant copies
of all notices either delivered to or received from the Prime Landlord that are
applicable to this Sublease or adversely affect Subtenant's rights hereunder.
15. Real Estate Brokers. Each of Sublandlord and Subtenant represents to
the other that it has not dealt with any real estate broker or any other party
to whom a commission may be owed with regard to this transaction. Each party
will indemnify, defend and hold the other harmless from all damages, liability
and expense (including reasonable attorneys' fees) arising from any claims or
demands of any broker or brokers or finders for any commission alleged to be due
such broker or brokers or finders in connection with its participating in the
negotiation this Sublease.
16. Quiet Enjoyment. Subtenant, upon keeping, observing and performing all
of the covenants and agreements of this Sublease on its part to be kept,
observed and performed, and upon paying the full amounts due under Section 5
(Rent) above and any other charges due under this Sublease, shall lawfully and
peacefully hold, occupy and enjoy the Sublease Premises during the Sublease
Term, free from interference by Sublandlord or anyone claiming by, through or
under Sublandlord, subject to the covenants and agreements contained in the
Prime Lease.
17. Entire Agreement. This Sublease contains the entire agreement between
Sublandlord and Subtenant regarding the Sublease Premises. Subtenant agrees that
it has not relied on any statement, representation or warranty of any person
except as set out in this Sublease. This Sublease may be modified only by an
agreement in writing signed by Sublandlord and Subtenant. No surrender of the
Sublease Premises, or of the remainder of the Sublease Term, will be valid
unless accepted by Sublandlord in writing.
18. Successors and Assigns. All provisions of this Sublease will be
binding on and will inure to the benefit of the successors and assigns of
Sublandlord and Subtenant, except that no person or entity holding under or
through Subtenant in violation of any provision of this Sublease will have any
right or interest in this Sublease or the Sublease Premises.
19. Computer Room Use for Disaster Recovery Server. Subtenant agrees that
Sublandlord may, during the term of this Sublease, utilize space in the computer
room in the Subleased Premises (as indicated in Exhibit A) to store and maintain
a disaster back-up server ("Back-up Server") that will back up the main server
that Sublandlord uses to run its business at 00 Xxx Xxxx. The Back-up Server
shall be a standard commercial server, of the size that fits into a standard
computer rack. Sublandlord shall be entitled to plug the Back-up Server into the
electrical system for the Subleased Premises, provided, however, that if the
amount of electricity consumed by the Back-up Server shall at any time be a
material amount, Subtenant reserves the right to charge Sublandlord, and
Sublandlord agrees to pay to Subtenant, a reasonable charge for such
consumption. Sublandlord shall be responsible for providing connection from the
Back-up Server to its own computer network, in a manner intended to cause as
little inconvenience to Subtenant as is practical and which shall not materially
interfere with Subtenant's use of the
Sublease Premises. Sublandlord shall insure the Back-up Server and shall bear
the risk of loss, except for losses caused by Subtenant's gross negligence or
intentional misconduct. Subtenant shall afford Sublandlord with reasonable
access to the Back-up Server to allow for maintenance and for use of the Back-up
Server in the case where Sublandlord's main server is inoperable. Subtenant
shall not use, retain, claim, disable or otherwise claim any interest in the
Back-up Server.
20. Prime Landlord Consent. This Sublease, and the obligations of
Sublandlord hereunder, is contingent upon the written consent of Prime Landlord
hereto.
21. Signage. Subtenant shall have all of Sublandlord's signage rights
under Section XXII of the Prime Lease applicable to the Subleased Premises. If
requested by Subtenant, Sublandlord shall cooperate with Subtenant, at no cost
to Sublandlord, in the enforcement of such rights with respect to the Prime
Landlord.
22. Non-Disturbance. Upon the request of Subtenant, Sublandlord shall, at
no cost to Sublandlord, use reasonable efforts to obtain from Prime Landlord an
agreement where by if the Prime Lease is terminated for any reason (other than
by a default by Subtenant under this Sublease) Prime Landlord agrees to
recognize Subtenant as a direct tenant under all of the terms and conditions of
this Sublease.
23. Parking. Subtenant shall have all of Sublandlord's parking rights
under Section II, "Use" of the Prime Lease applicable to the Subleased Premises.
If requested by Subtenant, Sublandlord shall cooperate with Subtenant, at no
cost to Sublandlord, in the enforcement of such rights with respect to the Prime
Landlord.
EXECUTION:
Sublandlord and Subtenant have executed this Sublease as of the date first
stated above.
SUBLANDLORD:
NETWORK ENGINES INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Its: Chief Financial Officer
-----------------------
SUBTENANT:
TECHMAR, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
----------------------
Its: Executive V.P. and Chief Financial Officer
------------------------------------------
EXHIBIT A
Sublease Premises
[Schematic Omitted]
EXHIBIT B
Prime Lease, as amended
[Previously filed as Exhibits 10.1 and 10.18 of the Company's
2000 Annual Report on Form 10-K, filed with the Securities and
Exchange Commission on December 21, 2000.]
