EXHIBIT 10.33
SUBLEASE
between
SATCON TECHNOLOGY CORPORATION
and
NORTHROP GRUMMAN CORPORATION
Dated
November 16, 1999
SUBLEASE
THIS SUBLEASE, made this 16 day of November 1999 between NORTHROP GRUMMAN
CORPORATION, A Delaware corporation, having its principal office at 0000 Xxxxxxx
Xxxx Xxxx, Xxx Xxxxxxx, XX 00000 (hereinafter called "Sublessor"), and SatCon
Technology Corporation, a Delaware Corporation, having its principal office at
000 Xxxxx Xxxxxx, Xxxxxxxxx, XX 02142(hereinafter called "Sublessee").
WITNESSETH:
WHEREAS, Friendship Realty Company, Inc. (hereinafter called "Lessor") and
Westinghouse Electric Corporation entered into a lease agreement dated June
9, 1980 for a building located at 0000 X. Xxxxxxx Xx., Xxxxxxxxx, XX., and
for a lease term expiring on May 31, 2000, as amended by agreements dated
October 12, 1992, March 8, 1993, and November 8, 1999 (the "Master Lease").
WHEREAS, the Master Lease was subsequently assigned to Sublessor.
WHEREAS, Sublessor desires to sublease a portion of the above property to
Sublessee.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Premises
1. (a) That for and in consideration of the payment by Sublessee of
the rent hereinafter reserved and the performance by Sublessee of the
covenants and agreements hereinafter agreed to be performed by it, and
in accordance with all of the provisions hereinafter set forth,
Sublessor does hereby sublet and demise unto the Sublessee and
Sublessee does hereby take and hire from the Sublessor approximately
14,863 rentable square feet of space as illustrated on Exhibit A, in
the premises at 0000 X. Xxxxxxx Xx., Xxxxxxxxx, XX, which is leased to
the Sublessor by the Lessor (the "Subleased Premises"), under the
aforementioned lease (the "Master Lease") dated June 9, 1980 and
amended most recently on October 12, 1992 and March 8, 1993.
(b) Sublessor and Sublessee further agree that at Sublessee's option,
for a period of six (6) months from the date of this Sublease, and
upon prior written notice to the Sublessor by Sublessee, Sublessee
shall have the right to expand the Subleased Premises into the area
designated "Optional Space" as illustrated on Exhibit "A". All costs
and expense of construction shall be the sole responsibility of the
Sublessee. This option is subject to the Lessor approval rights as
described in the Master Lease. Any expansion into the Optional Space
will be allowed only after plans submitted by Sublessee to the
Sublessor are approved by Sublessor and Lessor, which approval shall
not be unreasonably withheld. A mutually acceptable amendment to this
Sublease will be executed by Sublessor and Sublessee which changes the
rentable square feet and rent, based upon the final footprint of the
improvements of the Optional Space.
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(c) Construction of any improvements will be coordinated through the
Sublessor and any construction management fees to the Lessor's
Property Management firm will be the sole responsibility of the
Sublessee.
Term
2. (a) This Sublease is for the term beginning on the date the last
signature is obtained on this Sublease and ending on March 31, 2002
subject to the provisions of Section 13.
(b) Sublessee will be granted a sublease renewal option for the
period April 1, 2002 through September 30, 2005, provided Sublessee is
not in default of the Master Lease or Sublease provisions and
Sublessee notifies Sublessor, in writing, Six (6) months in advance of
any expiration.
(c) Provided the Sublessor extends the term of the Master Lease
beyond September 30, 2005 and the above described Master Lease
extension occurs, Sublessee shall have the option to further extend
the term of the Sublease for two (2) additional two (2) year periods,
provided Sublessee is not in default of the Master Lease or Sublease
provisions and Sublessee notifies Sublessor, in writing, six (6)
months in advance of any expiration. Not withstanding the above,
Sublessor shall be under no obligation to extend the Master Lease
(d) Notwithstanding the foregoing, at anytime after the third
anniversary of the commencement date, either party shall have the
right to terminate this sublease at any time, upon six (6) months
prior written notice to the other party hereto.
Use 3. Sublessee shall use the Subleased Premises only for the same use
as is allowed Sublessor pursuant to Section 1 of the Master Lease, a
true and correct copy of which is attached hereto, as Exhibit "B" and
made a part hereof. Sublessee will comply with any and all laws,
ordinances, orders and regulations of any governmental authority which
are applicable to its use of the Subleased Premises and shall comply
with all provisions of the Master Lease.
Rents and Additional Rent
4. (a) Sublessee shall pay Sublessor One Hundred Fifty Six Thousand
Sixty Two dollars ($156,062.00), per year ("Annual Rent") ($10.50 per
rentable square foot) payable in equal monthly installments of
Thirteen Thousand Five and 17/100 dollars ($13,005.17) in advance on
the first day of each month during the term of this sublease without
deduction, set off or demand. Rent for any portion of a month shall be
prorated on a thirty (30) day basis. Rent payments will be delivered
to Sublessor's agent located at Northrop Grumman Corporation, X.X. Xxx
00000, Xxxxxxxxx, XX 00000, Attn: Real Estate MS A465, or such other
place as Sublessor may designate.
(b) The Annual Rent set forth in paragraph 4.(a) above is comprised
of $71,342.00 annually ("Base Rent") ($4.80 per rentable square foot)
and $84,720.00 annually
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("Additional Rent") ($5.70 per rentable square foot) for services to
include janitorial, exterior maintenance and repairs, snow and ice
removal, water and sewer, real estate taxes and electric. The
allocated cost for electrical consumption is $44,589.00 annually
($3.00 per rental square foot).
(c) Sublessor and Sublessee each at its sole cost shall have the
right to install an electrical submeter for the purpose of measuring
the Sublessee's electrical consumption. Sublessee agrees to pay
Sublessor the cost of electricity consumed by Sublessee based upon the
same rates charged by the electrical provider to the Sublessor,
including any prorata amount for surcharges or taxes. The Sublessor
will deduct from the additional rent stated above in paragraph 4.(b)
$44,589.00 annually ($3.00 per rentable square foot) if submetering is
used to determine the cost of electric service provided to the
Sublessee.
(d) The Annual Rent obligation (Base Rent and Additional Rent) for
any Sublessee option period shall increase by four (4) percent for
each option period exercised by Sublessee.
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By way of example:
---------------------------------------------------------------------------------------------
Annual Annual
Period Base Rent Additional Rent Total Annual Rent
---------------------------------------------------------------------------------------------
Sublease Start - 3/31/2002 $71,342.00 $84,720.00 $156,062.00
---------------------------------------------------------------------------------------------
First Option Period
4/1/2002 - 9/30/2005 $74,195.68 $88,108.80 $162,304.48
---------------------------------------------------------------------------------------------
Second Option Period
10/1/2005 - 9/30/2007 $77,163.51 $91,633.14 $168,796.65
---------------------------------------------------------------------------------------------
Third Option Period
10/1/2007 - 9/30/2009 $80,250.05 $95,298.46 $175,548.51
---------------------------------------------------------------------------------------------
Assignments and Subletting
5. Sublessee does not have the right to assign, or sublease to a
third party any or all of the Subleased Premises. Sublessee may only
assign this Sublease or further sublet the Subleased Premises or any
part thereof with prior written consent of Sublessor and Lessor which
consent may be withheld or conditioned by Sublessor or Lessor in their
sole discretion. Sublessee shall give Sublessor 30 days prior written
notice of any proposed subletting. Notwithstanding the above, no
consent shall be required from Sublessor in connection with a sub-
sublease or assignment to any entity with which Sublessee may merge,
or to any entity acquiring substantially all of Sublessee's stock or
assets and providing that no such transfer, assignment or sub-
subletting shall relieve Sublessee from its duty to perform fully all
of the agreements, covenants, and conditions set forth in this
Sublease or the Master Lease. In addition Sublessee shall not
transfer, assign or sub-sublet to any entity which would create a
violation of Sublessors security requirements under its Government
contracts.
Alterations, Additions or Improvements
6. (a) Sublessee shall not make any alterations, additions or
improvements, to the Subleased Premises without Sublessor's prior
written consent, which consent shall not be unreasonably withheld or
delayed and the written consent of the Landlord under the lease. All
work done pursuant to this Section 6 shall be done in a good and
workmanlike manner in full compliance with all applicable laws, and
the structural integrity of the building shall not be impaired, and no
liens shall attach to the Subleased Premises by reason thereof. Upon
termination of this Sublease, such alterations, additions, or
improvements shall, at the option of the Sublessor, (1) become the
property of Sublessor, or (2) by notice given to Sublessee at the time
Sublessor and Lessor approve such alterations, additions, or
improvements be removed by the Sublessee at it's expense, provided
that any part of the Subleased Premises affected by such removal shall
be restored to its original condition, reasonable wear and tear
excepted.
(b) At the written request of the Sublessee, the Sublessor will
coordinate and contract for any alteration, additions or improvements
including the construction of the
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Optional Space as referenced in Section 1.(b) that the Sublessee may
require from time to time. Sublessee agrees to reimburse Sublessor for
all third party costs incurred by Sublessor in connection with any
alteration, additions or improvements.
Preparation for Occupancy
7. At the commencement of the term, Sublessee shall accept the
Premises in its then "as is" condition. Sublessor shall not be
required to perform work of any kind or nature.
Incorporation of Prime Lease
8. This sublease is subordinate to and is subject to all of the
terms of the Master Lease. All of the terms with which Sublessor is
bound to comply under the Master Lease shall, to the extent that they
apply to the Subleased Premises and except as otherwise provided
herein, be binding upon Sublessee, and all of the obligations of
Lessor set forth in the Master Lease shall, to the extent that they
apply to the Subleased Premises, inure to Sublessee's benefit. It is
the intention of the Sublessor and Sublessee that, except as otherwise
provided in this sublease, the relationship between Sublessor and
Sublessee shall be governed by the language of the various articles of
the Master Lease as if they were typed out in this Sublease in full,
and the words "Lessor" "Lessee" and "Lease" as used in the Master
Lease, shall read, respectively, "Sublessor", "Sublessee" and
"Sublease".
Quiet Enjoyment
9. Sublessor covenants and agrees with Sublessee that upon Sublessee
paying the Annual Rent reserved in this Sublease and observing and
performing all of the other obligations, terms, covenants and
conditions of this Sublease on Sublessee's part to be observed and
performed, Sublessee may peaceably and quietly enjoy the Subleased
Premises during the term; provided, however, that this Sublease shall
automatically terminate upon termination or expiration of the Master
Lease and Sublessee shall have no claim against Sublessor unless such
termination was caused by the default of Sublessor in the performance
of its obligations under the Master Lease which have been assumed by
Sublessor under this Sublease and have not been assumed by Sublessee
hereunder.
Notices 10. All notices, demands and requests which may be or are required to
be given by either party to the other shall be in writing and shall be
effective only upon receipt. All such notices, demands and requests
shall be sent via registered U.S. mail postage prepaid, return receipt
requested, addressed:
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to the Sublessor: Northrop Grumman Corporation
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Real Estate Manager MS-A465
Telephone: (000) 000-0000
with a copy to: Northrop Grumman Corporation
Real Estate Department
Legal Notices
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
to the Sublessee: SatCon Technology Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Either party may designate in writing any changes in address or
addresses of substitute or additional persons to receive such notices.
The effective date of service of any notice shall be the date such
notice was received. Inability to deliver a notice, due to a change in
address without notice by the addressee, shall be considered for all
purposes under this Sublease, a delivered notice effective as of the
mailing date.
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Environmental
11. The following environmental provisions apply to this Sublease:
(a) "Hazardous Materials" shall mean any material or substance (a)
which is defined as a "hazardous substance", "hazardous waste",
"extremely hazardous substance", "hazardous chemical," "toxic
substance", "pollutant", "contaminant" or the like under any federal,
state, or local environmental, or occupational health and safety,
statute, law, regulation, rule or ordinance ("Environmental Laws", as
more specifically defined below), (b) which contains polychlorinated
biphenyls (PCBs), (c) which contains asbestos, (d) which is
radioactive, or (e) the presence of which requires investigation or
remediation under any Environmental Law, as well as any toxic or
otherwise hazardous substance, material or waste which is or becomes
regulated as such by any Environmental Law.
(b) Without the prior written consent of Sublessor, Sublessee shall
not cause, allow or permit the escape, disposal or release of
Hazardous Materials in, around or from the Subleased Premises, except
in accordance with all applicable Environmental Laws. Sublessee shall
not store, use or allow the storage or use of Hazardous Materials in
the interior of the Subleased Premises in any manner not sanctioned by
law or the standards prevailing in the industry for handling and
storage of such Hazardous Materials. Sublessee is specifically
prohibited from storing Hazardous Materials in or around the exterior
of the Subleased Premises. In the event that any such Hazardous
Materials are required to be used by Sublessee in the ordinary course
of its business, Sublessee shall keep in the Subleased Premises and
supply a copy of same to Sublessor upon oral request, the uses of such
substances, including a copy of the applicable Material Safety Data
Sheet ("MSDS") if any, or other identification of such substances or
materials. Sublessee shall remain strictly responsible and liable for
any and all consequences, direct or indirect, resulting from the use
of such Hazardous Materials in or around the Subleased Premises,
including liability for all cost and expenses necessary to investigate
and remediate such Hazardous Materials unless such Hazardous Materials
were actually introduced to the subleased premises prior to the
commencement date of this Sublease. With respect to Hazardous
Materials introduced to the Subleased Premises after the commencement
date of this Sublease, Sublessee shall, at its sole cost and expense,
take any and all actions required to restore the Subleased Premises to
their conditions prior to the commencement date of this Sublease, and
in accordance with the requirements of any federal, state or local
governmental agency.
(c) Sublessee shall conduct all of its operations at the Subleased
Premises in compliance with all federal, state and local statutes
(including, but not limited to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et
seq., as amended, (CERCLA); the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq., as amended (RCRA); the Clean Air
Act, 42 U.S.C. 7401 et seq., as amended, the Clean Water Act, 33
U.S.C. Section 1251 et seq., as amended, the Occupational Health and
Safety Act 29 U.S.C. Section 651 et
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seq., as amended, and all applicable federal, state and local statues
related to health and safety and the environment now or hereafter
enacted and any additions and amendments thereto and regulations
enacted thereunder, ordinances, orders and requirements of common law,
regarding, but not limited to, (i) discharges to the air, soil,
surfaces or ground water; and (ii) handling, utilizing, storage,
treatment or disposal of any Hazardous Materials as defined therein
("Environmental Laws"). Sublessee shall obtain all permits, licenses
or approvals and shall make all notifications and registrations
required by Environmental Laws and shall submit to Sublessor, upon
request, for inspecting and copying all documents, permits, licenses,
approvals, manifest and records required to be submitted and/or
maintained by the provisions of the Environmental Laws. Sublessee
shall provide promptly to Sublessor copies of any permits, licenses,
approvals, notices of violations, summons, orders, complaints or other
documents received by Sublessee pertaining to compliance with the
Environmental Laws in the Subleased Premises.
(d) Sublessee shall not store any hazardous material or equipment
exterior to the building.
(e) If, Sublessor has evidence that there has been a release of
Hazardous Materials, Sublessor may require testing by an environmental
testing entity mutually agreed to by both parties hereto to ascertain
whether there has been a release of Hazardous Materials by Sublessee,
its agents, servants, employees or business invitees, in or around the
Subleased Premises. The reasonable costs of such testing shall be
reimbursed by Sublessee to Sublessor. If Lessor or any applicable
governmental agency requires environmental testing, then such testing
shall be performed and paid for in the manner described above.
Sublessee shall execute affidavits or representations, at Sublessor's
request, stating that to the best of Sublessee's knowledge and belief
after due inquiry, since the time that Sublessee took possession of
the Subleased Premises, there have been no unauthorized releases of
Hazardous Materials in, on or around the Subleased Premises.
(f) Sublessee hereby agrees to indemnify Sublessor and Lessor and to
hold Sublessor and Lessor harmless of, from and against any and all
expense, loss, cost, damages, fines, penalties, loss of value to the
leasehold estate or liability suffered by Sublessor by reason of
Sublessee's breach of any of the provisions of this Section 11.
(g) The provisions of this Section 11 shall survive the termination
of Sublessee's tenancy of this Sublease.
Sublessor and Sublessee Responsibilities
12. (a) Sublessee shall maintain and keep in good order and condition
the building utility systems serving the Subleased Premises including,
electrical, heating, air conditioning and plumbing systems. Except for
Sublessee's negligence or intentional acts, Sublessor shall be
responsible for the maintenance of the roof and building structure.
Sublessor shall provide janitorial and trash removal services.
Sublessor shall
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be responsible for payment of Real Estate Taxes. Sublessor shall allow
Sublessee access to the Sublessor's toilet facilities. Sublessee shall
not be obligated to make any repairs to the Subleased Premises that
are a capital expenditure as determined by generally accepted
accounting practices.
(b) Sublessee shall comply with all rules, regulations and security
requirements of the United States Government and its agencies as may
be required by Sublessor.
(c) Sublessee shall maintain and keep in good order and condition the
interior of Subleased Premises.
(d) Sublessee shall pay at its sole cost, for all maintenance and all
improvements, ordinary and extraordinary, required due to its specific
use of the Subleased Premises.
Termination
13. This Sublease shall terminate upon the occurrence of any of the
following:
(a) Full destruction of the Subleased Premises.
(b) Any exercise of the power of eminent domain by any governmental
authority, Federal, State, County, or municipal, or by any other party
vested by law with such power which shall at any time prevent the full
use and enjoyment of the Subleased Premises by Sublessee for the
purposes set forth in Section 3.
(c) Termination or Expiration of Sublessor's tenancy under the Master
Lease.
Security 14. Sublessee shall comply with the overall physical security and fire
protection requirements of the entire facility as well as the space
occupied by the Sublessee as reasonably directed by the Sublessor.
Sublessor shall maintain the existing building security monitoring,
however Sublessor shall not be liable for and Sublessee will hold
Sublessor harmless from any loss, damage, personal injury or death
resulting from any occurrence on the Subleased Premises, unless caused
by Sublessor's gross negligence or willful misconduct. Sublessor shall
have complete access to the Subleased Premises provided Sublessor
gives 24 hour notice to Sublessee except in the case of emergencies,
in which case Sublessor shall be allowed access without prior notice
to Sublessee.
Parking 15. Sublessee shall be allowed to park up to 40 automobiles on the
adjacent remote Parking Lots in unreserved spaces. Sublessee will be
allowed to park in front of the Subleased Premises in those areas
illustrated on Exhibit "A".
Insurance 16. (a) The Sublessee covenants that it will not do nor permit to be
done, nor keep nor permit to be kept upon the said premises, anything
which will contravene the policy or policies of insurance against loss
by fire or other causes, or which will increase the rate of fire or
other insurance on the building on the premises beyond the
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rate in effect on the commencement date of this lease. Should any act
of the Sublessee so increase said rate, then in addition to the
rentals hereinabove provided for, the Sublessee shall be liable for
such additional premium which shall be payable when billed, as
additional rent, collectible in the same manner as the rents
hereinabove provided for. Sublessee covenants that under no
circumstances will it keep or permit to be kept, do or permit to be
done in or about said Subleased Premises, anything of a character so
hazardous as to render it difficult, impracticable or impossible to
secure such insurance in companies acceptable to the Sublessor, and
further, immediately upon notice, to remove from the Subleased
Premises and/or desist from any practice deemed by the insurance
companies or the Association of Fire Underwriters as so affecting the
insurance risk.
(b) Sublessee shall and will save and keep harmless and indemnify the
Sublessor from and against any and all claims for damages whatsoever,
and the cost of defending against the same, of any kind or nature,
including personal injuries, arising in any manner or under any
circumstances relating to Sublessee's use of the Subleased Premises
during the term hereof, whether such damage, including personal
injury, be sustained by the Sublessee or its officers, agents,
employees or invitees or by other persons or corporations which seek
to hold the Sublessor liable unless caused by Sublessor's gross
negligence or willful misconduct. Sublessee further agrees to maintain
comprehensive public liability and property damage insurance with an
insurance company reasonably acceptable to Sublessor to protect the
Sublessor in the minimum amount of $1,000,000 for each occurrence for
bodily injury (or death) and/or property damage with a $2,000,000
aggregate. Such policy shall cover the entire Subleased Premises
including any such sidewalk, streets and parking area adjoining
Subleased Premises; shall be issued in form reasonably satisfactory to
Sublessor; shall provide for at least twenty (20) days' notice to
Sublessor before cancellation; and such policies or certificates
thereof shall be delivered to Sublessor.
(c) Sublessee and Sublessor each hereby waives any and all rights of
recovery against the other or against the officers, employees, agents
and representatives of the other, for loss or damage to such waiving
party or its property or the property of others under its control,
where such loss or damage is insured against under any insurance
policy in force at the time of such loss or damage. Sublessee and
Sublessor shall, upon obtaining the policies of insurance required
hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Sublease.
Sublessor Obligations to Lessor
17. Pursuant to the Master Lease, Sublessor shall be and remain
liable to Lessor for payment of rent and all other amounts provided
for in the Lease and to keep and be bound by all the terms, conditions
and covenants of the Lease.
Applicable Law
18. This Sublease shall be construed in accordance with, and its
performance shall be governed by, the laws of the state of Maryland.
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IT IS FURTHER CONVENANTED AND AGREED by and between the parties
hereto that the convenants and agreements herein contained shall bind
and inure to the benefit of the Sublessor and the Sublessee and their
respective successors and assigns.
IN WITNESS WHEREOF, the Sublessor and the Sublessee have caused this
agreement to be executed by their duly authorized officers as of the day and
year first above written.
WITNESS: NORTHROP GRUMMAN CORPORATION
/s/ Xxxx Xxxxx By: /s/ Xxxxxx Xxxxx
------------------------------- -------------------------------------------
Xxxx Xxxxx Its: Corporate Vice President and Treasurer
Administrative Assistant
WITNESS: SATCON
/s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------- ------------------------------------------
Xxxxxxx X. Xxxxxxxx Its: President
CFO -------------------------------------
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