Exhibit 10.36
SUBLEASE AGREEMENT
This Sublease Agreement (this "SUBLEASE") is made and entered into as of
the 30th day of June, 2002, by and between MOHAWK/CDT, A DIVISION OF CABLE
DESIGN TECHNOLOGIES, INC., a Washington corporation ("SUBLANDLORD"), and PHARMA
GROUP, INC., a Delaware corporation ("SUBTENANT") (Sublandlord and Subtenant are
hereinafter sometimes collectively referred to as the "PARTIES" or the
"PARTIES").
W I T N E S S E T H:
WHEREAS, Sublandlord, as tenant, and Chizmas Realty Trust, a Massachusetts
realty nominee trust, as landlord ("LESSOR"), have heretofore entered into a
certain Lease (the "MASTER LEASE"), dated as of January 16, 2001 providing for
the leasing of that certain building located at 0 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxx, certain appurtenances to the building, the land on
which the building is located and certain other areas and facilities and more
particularly described in the Master Lease (collectively, the "PREMISES") for a
lease term commencing July 1, 2001 and ending June 30, 2006; and
WHEREAS, Sublandlord desires to sublease the Premises to Subtenant, and
Subtenant desires to sublease the Premises from Sublandlord, upon the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing preambles, the payment of
Ten Dollars ($10.00) by Subtenant to Sublandlord, the occupancy of the Premises
by Subtenant pursuant to the terms hereof, the covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby covenant,
acknowledge, represent and agree as follows:
1. DEMISE; TERM. Sublandlord hereby subleases the Premises to Subtenant,
and Subtenant hereby subleases the Premises from Sublandlord, for a term (the
"SUBLEASE TERM") commencing as of July 1, 2002 (the "SUBLEASE TERM COMMENCEMENT
DATE"), and expiring March 27, 2006 or on the Extended Termination Date (as
hereinafter defined) or on such earlier date upon which said term may expire or
terminate pursuant to any of the conditions of limitation or other provisions of
the Master Lease or this Sublease or pursuant to the provisions of any present
or future constitution, law, statute, ordinance, rule, regulation, other
governmental order or controlling judicial determination of any federal, state,
local, municipal or other governmental body, agency or authority having or
asserting jurisdiction and all departments, commissions, boards and officers
thereof (collectively the "LAWS"). Notwithstanding anything herein to the
contrary, the Sublease Term shall terminate upon the termination of the Term of
the Master Lease. Subtenant and Sublandlord agree that no extension rights or
renewal options have been granted to Subtenant by Sublandlord and this Sublease
shall not be conditioned or contingent upon Subtenant receiving extension or
renewal rights from any party.
(a) If, prior to March 27, 2006, Subtenant and Lessor enter into a lease of
the Premises, then the Sublease Term shall expire on June 30, 2006 (the
"EXTENDED TERMINATION DATE)" without the necessity of execution of any further
documentation.
2. RENT.
(a) BASE RENT.
(i) INITIAL BASE RENT. Beginning on the Sublease Term Commencement
Date through the June 30, 2004, Subtenant agrees to pay to Sublandlord base
rent for the Premises (the "BASE RENT") during the Sublease Term in the
amount of Forty Three Thousand Three Hundred Thirty Three and 34/100
Dollars ($43,333.34) per month, which Base Rent shall be payable in equal
consecutive monthly installments.
(ii) CONSUMER PRICE ESCALATION. The Base Rent payable by Subtenant for
the period July 1, 2004 through the June 30, 2005 ("LEASE YEAR 3") and for
the period July 1, 2005 through the expiration date of the Sublease Term
("LEASE YEAR 4") shall be subject to a consumer price adjustment
(hereinafter referred to as "ADJUSTMENT") calculated as hereinafter set
forth:
1. LEASE YEAR 3. For Lease Year 3, the Adjustment in Base Rent
shall be determined by multiplying the Base Rent set forth in
Paragraph 2(a)(i) above by a fraction, the numerator of which shall be
the Price Index for the month of June, 2004 and the denominator of
which shall be the Price Index for the month of December, 2002; and
2. LEASE YEAR 4. For Lease Year 4, the Adjustment in Base Rent
shall be determined by multiplying the Base Rent set forth in
Paragraph 2(a)(i) above by a fraction, the numerator of which shall be
the Price Index for the month of June, 2005 and the denominator of
which shall be the Price Index for the month of December, 2002; and
3. If the amounts calculated in Paragraph 2(a)(ii)1. or
2(a)(ii)2. above result in a decrease of Base Rent, Base Rent shall
not be decreased but shall remain at the rate paid prior to such
Adjustment until the next Adjustment subject, however, to this
Paragraph 2(a)(ii)3.
(iii) TIMING OF PAYMENT OF BASE RENT. Each monthly installment of Base
Rent shall be due and payable in advance on the fifth (5th) business day
prior to the first day of each calendar month of the term hereof,
commencing with the payment of the Base Rent for July, 2002 being due and
payable upon the execution hereof, and continuing on the fifth (5th)
business day prior to the first day of each calendar month thereafter
throughout the Sublease Term. In the event the Sublease Term commences or
expires on any day other than the first or last day of a month,
respectively, then the Base Rent for such a month shall be paid for the
fraction of the month during which a portion of the Sublease Term exists,
with the Base Rent and
2
estimated Total Operating Costs (as hereinafter defined) for the period
commencing on the Sublease Term Commencement Date and terminating on July
31, 2002 being payable upon execution of this Sublease.
(b) PAYMENT OF ADDITIONAL RENT UNDER MASTER LEASE. Except for "Base Rent"
(as defined in the Master Lease) payable under the Master Lease, Subtenant shall
also pay to Sublandlord all "Additional Rent" (as defined in the Master Lease)
and all other amounts, impositions and assessments payable by Sublandlord under
the Master Lease as fully and completely as though Subtenant were the tenant
named therein.
(i) PAYMENT OF TOTAL OPERATING COSTS. In furtherance of the provisions
of this Paragraph 2(b), Subtenant shall pay all "TOTAL OPERATING COSTS" (as
defined in the Master Lease) that are payable by Sublandlord under the
Master Lease as follows:
1. Subtenant shall pay, on a monthly basis, the amount of the
estimated Total Operating Costs as determined by the Lessor from time
to time under Section 4.2 of the Master Lease, each such monthly
installment to be due and payable in advance on the fifth (5th)
business day prior to the first day of each calendar month of the term
hereof, commencing with the estimated Total Operating Costs in the
amount of $7,892.48 for July, 2002 being due and payable upon the
execution hereof, and continuing on the fifth (5th) business day prior
to the first day of each calendar month thereafter throughout the
Sublease Term (estimated Total Operating Costs for the period
commencing on the Sublease Term Commencement Date and terminating on
July 31, 2002 being payable upon execution of this Sublease as
provided in Paragraph 2(a)(iii) above);
2. Upon Lessor's notice to Subtenant of an adjustment in the
amount of such estimate of Total Operating Costs pursuant to Section
4.2 of the Master Lease (A) Sublandlord shall provide a copy of such
notice to Subtenant as soon as reasonably practicable after receipt
thereof, (B) such adjustment shall be effective as of the month
specified in the notice from Lessor, and (C) the payment of estimated
Total Operating Costs under Paragraph 2(b)(i)1. above shall be
adjusted accordingly;
3. Upon Lessor's delivery to Sublandlord of a statement (the
"STATEMENT") setting forth the Total Operating Costs paid or incurred
by Lessor during the preceding fiscal year pursuant to Section 4.2 of
the Master Lease, Sublandlord shall provide a copy of such statement
to Subtenant as soon as reasonably practicable after receipt thereof;
4. If the adjustment of Total Operating Costs pursuant to Section
4.2 of the Master Lease after issuance of the Statement between Lessor
and Sublandlord requires that Sublandlord pay any amounts to Lessor,
then Subtenant shall remit its proportionate share of such amount
3
(determined based on the number of days during the fiscal year in
which this Sublease was in effect compared to the total number of days
in such fiscal year) to Sublandlord promptly after receipt of request
for same or directly to Lessor in the manner and within the time
periods prescribed in Paragraph 2(e) if Subtenant is paying Direct
Payments (as hereinafter defined) to the Lessor at that time under
Paragraph 2(e); and
5. If the adjustment of Total Operating Costs pursuant to Section
4.2 of the Master Lease requires that the Lessor give a credit to
Sublandlord for overpayment, the amount of monthly estimates of Total
Operating Costs payable by Subtenant hereunder shall be adjusted to
reflect the adjustment of the Total Operating Costs payable to the
Lessor under the Master Lease.
(c) PAYMENT OF ADDITIONAL RENT UNDER SUBLEASE. In addition to the
payment of Base Rent and the Total Operating Costs described above,
Subtenant agrees to pay to Sublandlord, as and for additional rent, the
following, all of which is collectively referred to herein as "ADDITIONAL
RENT": all Additional Rent (as defined in the Master Lease) payable by
Sublandlord under the Master Lease, the Total Operating Costs as described
in Paragraph 2(b)(i) above, the sums specified in Paragraph 8 and such sums
as are otherwise specified in this Sublease. Unless otherwise specified,
all Additional Rent shall be paid in the same manner as monthly
installments of Base Rent and estimated Total Operating Expenses.
(d) METHOD FOR PAYMENT OF RENT; NO DEMAND, ETC. All payments of Base
Rent, Additional Rent and other amounts payable by Subtenant hereunder
shall be payable without previous demand therefor and shall be payable in
lawful money of the United States of America. Subject to Paragraph 2(e)
below, all such payments shall be made at the address of Sublandlord set
forth in Paragraph 17 of this Sublease or at such other address as
Sublandlord may from time to time designate by notice to Subtenant.
(e) SUBTENANT'S ELECTION TO PAY RENT DIRECTLY TO LESSOR. Subtenant may
elect to pay Base Rent and the Total Operating Costs and other amounts
payable pursuant to Paragraph 2(b) (the "DIRECT PAYMENTS") directly to the
Lessor subject to the following:
(i) In order to elect to make the Direct Payments to Lessor,
Subtenant shall provide a written notice of such election to
Sublandlord. Once such election is made, Subtenant shall be obligated
to make the Direct Payments to Lessor in accordance with this
Paragraph 2(e) for the remainder of the Term except as provided in
Paragraph 2(e)(iii) below.
(ii) All Direct Payments shall be paid to Lessor so that payment
thereof shall be received by Lessor not later than the fifth (5th)
business day prior to the date same is due under the Master Lease.
Subtenant shall provide Sublandlord with written evidence of the
payment of such Direct Payments not later than the fifth (5th)
business day prior to the date same is due under the Master Lease.
4
(iii) In the event that Subtenant shall fail to pay or provide
evidence of Direct Payments within the time periods prescribed in
Paragraph 2(e)(ii) above, such failure shall constitute a default of
Subtenant hereunder without the requirement that Sublandlord provide
Subtenant notice of same. Once such a default occurs, Subtenant shall
have no further right to pay Direct Payments to the Lessor and
Subtenant shall pay all Rent and other amounts payable by Subtenant
hereunder to Sublandlord as required under Paragraphs 2(a) through (d)
hereof and Sublandlord shall remit same as provided in Paragraph 8
hereof.
3. SECURITY DEPOSIT. Contemporaneously with the execution of this Sublease,
Subtenant has delivered to Sublandlord a security deposit (the "SECURITY
DEPOSIT") in the amount of One Hundred Fifty Thousand Dollars ($150,000). The
Security Deposit shall be held by Sublandlord as security for the payment by
Subtenant of all sums required to be paid by Subtenant hereunder, and for the
due and faithful performance by Subtenant of all of the other terms, provisions,
covenants and conditions of this Sublease, and may be applied, at Sublandlord's
option towards the curing of any default (as such term is defined in Paragraph
14 of this Sublease) without limiting Sublandlord's right to pursue any and all
other rights and remedies available to it against Subtenant. In the event the
Security Deposit shall not be utilized for any of the purposes set forth herein,
the same shall be returned by Sublandlord to Subtenant, without the payment of
any interest thereon, within sixty (60) days following termination or expiration
of the term of this Sublease, whether by lapse of time or otherwise, provided
the outstanding balances of Base Rent and Additional Rent, if any, have been
paid to Sublandlord in full. Should all or any part of the Security Deposit be
applied by Sublandlord in accordance with the terms hereof to the curing of any
default, Subtenant immediately shall pay Sublandlord a sufficient sum in cash to
restore the Security Deposit to One Hundred Fifty Thousand Dollars ($150,000).
Sublandlord may commingle the Security Deposit with other funds of Sublandlord.
Subtenant shall not assign or encumber or attempt to assign or encumber the
monies deposited herein as the Security Deposit and neither Sublandlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or encumbrance. This Sublease does not create a trust
relationship between Sublandlord and Subtenant with respect to the Security
Deposit, and Sublandlord shall be entitled to treat such Security Deposit as
Sublandlord's own property, subject only to Subtenant's right to receive
repayment of it as and to the extent provided in this Paragraph 3.
4. ASSIGNMENT; SUBLETTING. Subtenant will not sublet the Premises, or any
portion thereof, or assign this Sublease in whole or in part, for collateral
purposes or otherwise, or permit use or occupancy of the Premises, or any
portion thereof, by others without (a) complying with the provisions of the
second paragraph of Section 6.1.6(b) of the Master Lease, (b) the prior written
consent of Sublandlord in each instance being first obtained, which consent may
be withheld at Sublandlord's sole discretion and with or without cause or
reason, and (c) the prior written consent of the Lessor in each instance being
first obtained, Subtenant hereby acknowledging that such consent of the Lessor
is governed by the provisions of the Master Lease and the Sublandlord shall not
have any obligation to enforce the obligations of the Lessor to grant consent as
provided in the Master Lease. In the event Sublandlord and Lessor shall consent
to any specific assignment, subletting, or occupancy, such consent shall not be
construed as relieving Subtenant from any liability under this Sublease
(including its obligations respecting the Master Lease) or from responsibility
for obtaining Sublandlord's and Lessor's prior written consent to any further
5
assignment, subletting or occupancy. Notwithstanding the foregoing, no consent
of Sublandlord shall be required if Subtenant assigns this Sublease to a parent,
subsidiary or subsidiary of Subtenant's parent, or to a surviving entity in the
event of a merger or consolidation involving all or substantially all of
Subtenant's assets provided that (i) the guaranty ("GUARANTY") of this Sublease
executed by DT Industries, Inc. ("DT") is in full force and effect or a
Substitute Guarantor (hereafter defined) shall have executed a replacement
guaranty in the same form as the Guaranty in replacement of the Guaranty, and
(ii) Subtenant is not in default hereunder. A "SUBSTITUTE GUARANTOR" shall mean
an entity that is incorporated or formed in the United States of America and has
a net worth equal to the net worth of Guarantor. If Subtenant assigns this
Sublease or sublets the Premises as permitted hereunder and a qualified
Substitute Guarantor executes a replacement guaranty that is accepted by
Sublandlord (as evidenced by a written acceptance of same), the Guaranty
executed by DT shall be deemed terminated without need for further action of any
party, and, upon such termination, DT shall be released from all obligations
arising under the Guaranty from and after the effective date of the replacement
guaranty (but not as to unsatisfied obligations under the Guaranty that arose
prior to the effective date of the replacement guaranty).
5. REFERENCE TO MASTER LEASE; SUBORDINATION; ESTOPPEL; NO TERMINATION OF
MASTER LEASE.
(a) REFERENCE TO MASTER LEASE. Subtenant hereby acknowledges that it
has received and fully reviewed a copy of the Master Lease, a copy of which
is attached hereto as EXHIBIT A, and the terms and provisions of the Master
Lease are hereby incorporated by reference as part of this Sublease, as
modified by the terms and provisions of this Sublease. Subtenant
furthermore hereby assumes and agrees to fully adhere to, perform and
comply with all covenants, agreements, terms, provisions, conditions,
duties and obligations contained in the Master Lease and imposed upon the
Tenant named therein as fully and completely as though Subtenant were the
Tenant named therein except:
(i) for the payment of "Base Rent" (as defined in the Master
Lease) or the payment of "Additional Rent" under the Master Lease
subject, however, to Paragraphs 2(c) and 2(e) hereof;
(ii) the provisions of Section 9.1 of the Master Lease shall be
modified as provided in Paragraph 14 of this Sublease;
(iii) in the event that the provisions of Section 9.2 of the
Master Lease apply to a termination of the Master Lease due to a
default of Subtenant under this Sublease, then Subtenant shall be
obligated to immediately pay to Sublandlord all amounts that
Sublandlord is obligated to pay to the Lessor under Section 9.2 of the
Master Lease;
(iv) that the following provisions of the Master Lease do not
apply to this Sublease:
1. Section 3.3;
6
2. Sections 4.1(A) and 4.1(B);
3. Sections 4.2, 4.3, 4.4 and 4.5 (provided, however, that
this Paragraph 5(a)(iv)3. shall in no way modify or limit the
obligation of Subtenant to pay Total Operating Costs and
Additional Rent under the Master Lease as provided in Paragraph 2
above);
4. Section 6.1.10, as to costs and fees payable under
Section 6.1.10 that are due to a default by Sublandlord
hereunder;
5. Section 6.1.13 if and to the extent Subtenant has vacated
the Premises in the manner and within the time periods required
herein;
6. Sections 10.1 and 10.2;
7. Section 10.12; and
8. Section 10.19.
(v) that references to "Base Rent" and "Additional Rent" in
Section 6.1.1 shall mean Base Rent and Additional Rent, respectively,
under this Sublease;
(vi) that, for any provision of the Master Lease that requires
the Tenant thereunder to provide indemnification to the Lessor or
other parties, that Subtenant shall be obligated to provide such
indemnification to Sublandlord, its employees, directors,
shareholders, agents and affiliates (the "SUBLANDLORD PARTIES")
subject, however, to Paragraph 12 hereof;
(vii) that, for any provision of the Master Lease that requires
the Tenant thereunder to obtain insurance and provide evidence of
same, that the additional insured parties under insurance to be
carried by Subtenant shall include the Sublandlord Parties and
Subtenant shall provide any certificates of insurance or other
evidence of insurance to Sublandlord in addition to providing same to
Lessor;
(viii) that, for any provision of the Master Lease that requires
the Tenant under the Master Lease to provide information or notices to
the Lessor and for any provision of the Master Lease that requires the
Lessor to approve of any proposed action, work, information or other
matter to be performed by, provided by or entered into by the Tenant
under the Master Lease, that the Subtenant shall provide such
information or notices to Sublandlord and Sublandlord shall deliver
same to Lessor or Sublandlord shall have the right to require
Subtenant to deal directly with Lessor and, in addition, Sublandlord
shall have a right to approve such action, work, information or other
matter, with such consent to be granted or withheld in the exercise of
Sublandlord's sole and absolute discretion; and
7
(ix) if the Tenant under the Master Lease has the option to
terminate the Master Lease under Section 7.1 of the Master Lease,
either Sublandlord of Subtenant may exercise such right (Subtenant's
exercise of such right to be accomplished by notice of such exercise
to Sublandlord and Sublandlord providing such notice to Lessor under
the Master Lease).
(b) SUBLANDLORD TO HAVE RIGHTS AND REMEDIES OF LESSOR UNDER MASTER
LEASE. In addition to those set forth in this Sublease, Sublandlord shall
also have all other rights, and all privileges, options, reservations and
remedies, granted or allowed to, or held by, the Lessor under the Master
Lease subject, however, to any modification of same pursuant to Paragraph
5(a) above.
(c) SUBORDINATION AND ESTOPPEL UNDER MASTER LEASE. Subtenant
acknowledges and agrees that the lien of this Sublease is, and at all times
shall be, expressly subject and subordinate to the Master Lease and the
rights of the Lessor under the Master Lease, and all present or future (i)
ground and underlying leases of all or any portion of the Premises, (ii)
mortgages or trust deeds which affect all or any portion of the Premises,
(iii) advances under such mortgages or trust deeds and (iv) renewals,
modifications, replacements and extensions of any such lease, mortgage or
trust deed. Upon the request of Sublandlord, Subtenant shall execute and
deliver, within five (5) days after receipt of the request, such
certificates of subordination and estoppel as reasonably may be requested
by Sublandlord, or Lessor under the Master Lease, to evidence the
subordination set forth above and provide information concerning the status
of this Sublease and otherwise comply with Section 8.1 of the Master Lease
provided that such agreements of subordination in favor of Lessor provide
for recognition of Subtenant's rights under this Sublease conditioned on
the tenant under the Master Lease not being in default thereunder (after
the expiration of any applicable notice and cure period) and Subtenant is
not in default of its obligations hereunder (after the expiration of any
applicable notice and cure period).
(d) NO TERMINATION OF MASTER LEASE. Prior to the occurrence or
continuation of a default hereunder by Subtenant after the expiration of
any applicable notice and cure period, Sublandlord shall not enter into any
agreement or take any other action to terminate the Master Lease or cause
it to be terminated prior to the expiration of the Term.
(e) SUBLANDLORD TO COOPERATE WITH SUBTENANT SEEKING TO ENFORCE TERMS
OF MASTER LEASE. Subtenant may enforce the rights of Sublandlord under the
Master Lease and Sublandlord shall provide its reasonable cooperation in
connection therewith provided that Subtenant reimburses Sublandlord for all
cost and expenses incurred in connection therewith (including the
reasonable costs of Sublandlord's counsel) and Sublandlord shall not be
obligated to incur any additional liability in connection therewith. The
costs and expenses of Sublandlord to be reimbursed by Subtenant under this
Paragraph 5(e) shall not include any costs or expenses incurred by
Sublandlord in resisting Subtenant's enforcement of the first sentence of
this Paragraph 5(e) hereof if such enforcement of the rights under the
Master Lease being sought by Subtenant (1) do not violate Sublandlord's
obligations under the Master Lease or Sublandlord's rights or obligations
under this Sublease, and (2) are not prohibited by the terms and provisions
of this Sublease.
8
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY SUBTENANT. In addition to and without
limitation of any indemnification obligations that Subtenant is obligated
to provide under the Master Lease in accordance with Paragraph 5(a)(vi) and
subject to Paragraph 12 hereof, Subtenant hereby indemnifies and agrees to
defend and hold Sublandlord and Lessor harmless from and against any and
all costs, claims, actions, actual damages, demands, expenses (including
attorney's fees), injuries, judgments, liabilities, losses and suits,
suffered, sustained or incurred by Sublandlord and Lessor in connection
with or as a result of any accident, act or omission, claim, hazard,
injury, violation of any health, fire, zoning, building or safety code,
ordinance or regulation during the Sublease Term or during any period (the
"OCCUPANCY PERIOD") prior to or subsequent to the Sublease Term during
which Subtenant is in possession of the Premises, including, without
limitation, the Americans with Disabilities Act, death or damage to person
or property arising, directly or indirectly, in whole or in part, out of
the business conducted in, or the use or occupancy of the Premises during
the Sublease Term or during the Occupancy Period, or occurring in, on or
about the Premises, or any portion thereof during the Sublease Term or
during the Occupancy Period, or arising, directly or indirectly, in whole
or in part, from any act or omission of Subtenant or its licensees,
servants, agents, employees or contractors during the Sublease Term or
during the Occupancy Period or the breach or default by Subtenant during
the Sublease Term or during the Occupancy Period of any term, provision,
covenant, or condition contained in the Master Lease or this Sublease
except for any such breach or default caused by or resulting from a default
or breach of Sublandlord of Sublandlord's obligations hereunder. This
indemnification shall include indemnifying Sublandlord in connection with
the exercise of Subtenant's rights under Paragraph 5(e) above. The scope of
this indemnification shall, at Sublandlord's option, include, but not be
limited to, defending or resisting, with attorneys satisfactory to
Sublandlord, any action, suit, claim or proceeding that may be filed,
instituted or brought against Sublandlord or to which Sublandlord may be
made a party. This indemnification shall not, however, include any
consequential damages.
For purposes of this Paragraph 6, Subtenant shall not be deemed in
possession of the Premises if it has vacated and surrendered the Premises
in accordance with its obligations under Paragraph 16 below.
In addition, but subject to Paragraph 12 hereof, Subtenant also hereby
indemnifies Sublandlord and Lessor and agrees to defend and hold
Sublandlord and Lessor harmless from and against any and all actions,
claims, costs, actual damages, demands, expenses (including attorneys'
fees), injuries, judgments, liabilities, losses and suits of any and every
kind, whatsoever paid, sustained, suffered or incurred, including all
foreseeable and all unforeseeable actual damages arising out of or in
connection with, or as a direct or indirect result of, Subtenant's or its
agents', employees', invitees' or contractors' use, manufacture,
generation, storage, disposal, release or introduction, on or under the
Premises, or Subtenant's or its agents', suppliers', guests', employees',
invitees' or contractors' transportation to, across, or from the Premises,
of any hazardous material (as defined herein) or Hazardous Substances (as
defined in the Master Lease), or the escape, seepage, leakage, spillage,
discharge, emission, discharging or release of any hazardous
9
material from the Premises as a result of the occupancy of the Premises
during the Sublease Term or during the Occupancy Period or the activities
occurring thereon or therein during the Sublease Term or during the
Occupancy Period. As used herein, the term "HAZARDOUS MATERIAL" shall mean
petroleum or any fraction thereof, natural gas, liquefied synthetic gas,
any mixture of natural and synthetic gas, and asbestos, and any material
defined as "hazardous substances," "hazardous waste," "hazardous
constituents," "solid waste," "hazardous materials," "extremely hazardous
waste," or "toxic substances," or words of similar meaning or import in any
federal, state or local statute, rule or regulation, as they may be
amended, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq., and the Hazardous Materials Transportation Act, 49
U.S.C. Section 6901 et seq., and in the regulations adopted and
publications promulgated pursuant to said laws (the "ENVIRONMENTAL LAWS").
This indemnification shall not, however, include any consequential damages.
(b) INDEMNIFICATION BY SUBLANDLORD. Subject to Paragraph 12 and
Paragraph 19(j) hereof, Sublandlord hereby indemnifies and agrees to defend
and hold Subtenant harmless from and against any and all costs, claims,
actions, actual damages, demands, expenses (including attorney's fees),
injuries, judgments, liabilities, losses and suits, suffered, sustained or
incurred by Subtenant in connection with or as a result of any accident,
act or omission, claim, hazard, injury, violation of any health, fire,
zoning, building or safety code, ordinance or regulation caused by
Sublandlord, or its agents, invitees, or contractors, or those occurring
during the period commencing on July 1, 2001 (being the Commencement Date
of the Master Lease) and terminating on the date immediately prior to the
Sublease Term Commencement Date (such period, the "SUBLANDLORD OCCUPANCY
PERIOD") including, without limitation, the Americans with Disabilities Act
(except for claims requiring that physical changes be made to the
Premises), death or damage to person or property arising, directly or
indirectly, in whole or in part, out of the business conducted in, or the
use or occupancy of the Premises during the Sublandlord Occupancy Period,
or occurring in, on or about the Premises, or any portion thereof during
the Sublandlord Occupancy Period, or arising, directly or indirectly, in
whole or in part, from any act or omission of Sublandlord or its licensees,
servants, agents, employees or contractors during the Sublandlord Occupancy
Period or the breach or default by Sublandlord during the Sublandlord
Occupancy Period or the Sublease Term of any term, provision, covenant, or
condition contained in the Master Lease or this Sublease except for any
such breach or default caused by or resulting from a default or breach of
Subtenant of Subtenant's obligations hereunder. The scope of this
indemnification shall, at Subtenant's option, include, but not be limited
to, defending or resisting, with attorneys satisfactory to Subtenant, any
action, suit, claim or proceeding that may be filed, instituted or brought
against Subtenant or to which Subtenant may be made a party. This
indemnification shall not, however, include any consequential damages.
In addition, but subject to Paragraph 12 hereof, Sublandlord also
hereby indemnifies Subtenant and agrees to defend and hold Subtenant
harmless from and against any and all actions, claims, costs, actual
damages, demands, expenses (including attorneys' fees), injuries,
judgments, liabilities, losses and suits of any and every kind,
10
whatsoever paid, sustained, suffered or incurred, including all foreseeable
and all unforeseeable actual damages arising out of or in connection with,
or as a direct or indirect result of, (i) Sublandord's or its agents',
employees', invitees' or contractors' use, manufacture, generation,
storage, disposal, release or introduction, on or under the Premises, or
Sublandlord's or its agents', suppliers', guests', employees', invitees' or
contractors' transportation to, across, or from the Premises, of any
hazardous material or Hazardous Substances, or (ii) the escape, seepage,
leakage, spillage, discharge, emission, discharging or release of any
hazardous material from the Premises as a result of the occupancy of the
Premises during the Sublandlord Occupancy Period or the activities
occurring thereon or therein during the Sublandlord Occupancy Period. This
indemnification shall not, however, include any consequential damages.
7. UTILITIES. As part of Subtenant's assumption of all of the obligations
of the Tenant under the Master Lease, Subtenant shall be responsible during the
Sublease Term for the payment of all utilities and services (including
landscaping and snow removal) that Sublandlord is obligated to pay under the
Master Lease. Subtenant shall, as soon as reasonably practicable after execution
hereof, transfer the billing for all such utilities and other services to
Subtenant, effective as of the Sublease Term Commencement Date. To the extent
that all such billing is not transferred as of the Sublease Term Commencement
Date, Subtenant shall be obligated to reimburse Sublandlord for Subtenant's
proportionate share of the cost of such utilities and services with respect to
the period commencing on the Sublease Term Commencement Date.
8. PAYMENT OF RENT UNDER MASTER LEASE; LATE CHARGES. Provided Subtenant
pays all rental and other sums due hereunder in a timely manner, Sublandlord
shall timely pay to Lessor the rent payable under the Master Lease within two
(2) business days after receipt thereof from Subtenant. Sublandlord shall
provide Subtenant with a copy of its payment of rent under the Master Lease or
provide other written evidence of payment (such as information on a wire
transfer, if paid via same). To the extent Subtenant has not made all payments
due hereunder when due, Subtenant shall be responsible for all late charges and
all other fees and costs imposed by Lessor under the Master Lease for late
payments. If Subtenant fails to make any payment of Base Rent or Additional Rent
hereunder when due, in addition to the foregoing Subtenant shall pay, and be
liable to Sublandlord for, (i) an administrative fee equal to five percent (5%)
of the overdue payment, and (ii) interest at the Interest Rate or any
installment of rent payable hereunder that is paid more than five (5) days after
the due date thereof from and after the fifth (5th) day after said payment is
due until paid in full, without regard to whether Sublandlord has incurred or
paid any late charges or penalties under the Master Lease. If Subtenant has
timely made its payments hereunder and Sublandlord has failed to make its
payments to Lessor required hereunder, Sublandlord shall be responsible for all
late charges and all other fees and costs imposed by Lessor under the Master
Lease as a result thereof.
9. CONDITION AND USE OF PREMISES.
(a) PREMISES TAKEN "AS IS". Subtenant acknowledges that it has fully
inspected the Premises, that it is satisfied with the condition thereof and
that it is taking the Premises in an "as is" condition as of the date
hereof, subject to Sublandlord's obligations under Paragraph 9.(b) hereof.
No promise of Sublandlord to alter, remodel or improve the
11
Premises, or any portion thereof, and no representation respecting the
condition of the Premises, or its compliance with the Americans with
Disabilities Act, has been made by Sublandlord or any employee, agent or
representative of Sublandlord to Subtenant. Subtenant's taking of
possession of the Premises shall constitute an unconditional acceptance by
it of the condition thereof subject, however, to Sublandlord's obligation
to remove the items of personal property as provided in Paragraph 9(b).
Subtenant expressly acknowledges and agrees that the right of Sublandlord
to object to any latent defects to the Premises under Section 3.1(b) of the
Master Lease or otherwise has lapsed and that Subtenant assumes all risks
of latent defects and shall be responsible for any repair of same that may
be required under the Master Lease.
(b) REMOVAL OF SUBLANDLORD'S PERSONAL PROPERTY.
(i) REMOVAL OF SUBLANDLORD'S PERSONAL PROPERTY. Prior to the
Sublease Term Commencement Date, Sublandlord shall remove all of its
movable personal property located at the Premises other than the
Racks.
(c) USE. Notwithstanding any provision of the Master Lease to the
contrary, Subtenant hereby agrees that the Premises shall at all times be
used and occupied in compliance with the provisions of the Master Lease and
for no other use or purpose whatsoever.
10. ALTERATIONS; IMPROVEMENTS. In addition to and without limitation of
Paragraph 5(a)(viii), Subtenant agrees that any and all alterations and
improvements to the Premises shall be subject to the Sublandlord's prior written
consent and to the provisions of the Master Lease, if any, relating to
alterations and improvements. Sublandlord shall be entitled to all of the rights
afforded Lessor under the Master Lease with respect to such alterations and
improvements without diminishing any of the rights of Lessor thereunder.
11. REPRESENTATIONS.
(a) REPRESENTATIONS OF SUBTENANT. Subtenant represents to Sublandlord
that, as of the date hereof:
(i) AUTHORITY. Subtenant has full power and authority under its
organizational documents to enter into and carry out the terms and
provisions of this Sublease and to execute and deliver this Sublease.
All actions necessary to confer such power and authority upon the
persons executing this Sublease on behalf of Subtenant have been
taken.
(b) REPRESENTATIONS OF SUBLANDLORD. Sublandlord represents to
Subtenant that, as of the date hereof:
(i) AUTHORITY. Sublandlord has full power and authority under its
organizational documents to enter into and carry out the terms and
provisions of this Sublease and to execute and deliver this Sublease.
All actions necessary to confer
12
such power and authority upon the persons executing this Sublease on
behalf of Sublandlord have been taken.
(ii) MASTER LEASE. A true and correct copy of the Master Lease is
attached hereto as EXHIBIT A.
(iii) COMPLIANCE WITH LAWS. Sublandlord has not received any
written notice of violations of law by the Premises that have not
heretofore been cured. To Sublandlord's actual knowledge (which, for
purposes of this Paragraph 11(b), shall be the actual knowledge of
Xxxxxx Xxxxxxxxx), the Premises are not in violation of law.
(iv) KNOWLEDGE PARTY. Xxxxxx Xxxxxxxxx is the individual employed
by Sublandlord that is responsible for oversight of the Premises on
behalf of Sublandlord.
(v) DEFAULTS UNDER MASTER LEASE. Sublandlord has not received any
written notice that it is in default of any of its obligations under
the Master Lease that has not heretofore been cured.
(c) SUBLANDLORD MAKES NO REPRESENTATIONS OR COVENANTS OF LESSOR. It is
expressly understood and agreed that Sublandlord does not assume and shall
not have any obligations or liabilities of Lessor under the Master Lease
and that Sublandlord is not making any representations or warranties made
by the Lessor under the Master Lease.
12. WAIVER OF CLAIMS.
(a) WAIVER BY SUBTENANT. Subtenant hereby waives any claim which may
arise against Lessor or Sublandlord during the Sublease Term for any loss
or damage to any of Subtenant's property or the property of any of its
agents, employees or invitees, located upon or constituting a part of the
Premises, or for any liability relating to personal injury or death in or
about the Premises which loss, damage or liability is covered by valid and
collectible fire and extended coverage, personal property or public
liability coverage under insurance policies or required by the terms hereof
to be insured against by Subtenant but only to the extent of the greater of
(1) the amount of insurance required to be maintained by Subtenant
hereunder if and to the extent such insurance would have covered such loss
or damage or (2) the amount of insurance actually carried by Subtenant to
the extent such insurance covers such loss or damage. Inasmuch as the
aforesaid waiver will preclude the assignment of any such claim by way of
subrogation or otherwise to an insurance company or any other person,
Subtenant agrees to give each insurance company which has issued fire and
extended coverage, personal property, property or public liability
coverage, written notice of the terms of said waiver immediately and shall
have said insurance policies properly endorsed with a waiver of
subrogation. Evidence of said waiver shall be forwarded to Sublandlord upon
request.
13
(b) WAIVER BY SUBLANDLORD. Sublandlord hereby waives any claim which
may arise against Subtenant during the Sublease Term for any loss or damage
to any of Sublandlord's property or the property of any of its agents,
employees or invitees, located upon or constituting a part of the Premises,
or for any liability relating to personal injury or death in or about the
Premises which loss, damage or liability is covered by valid and
collectible fire and extended coverage, personal property or public
liability coverage under insurance policies or required by the terms hereof
to be insured against by Sublandlord but only to the extent of the greater
of (1) the amount of insurance required to be maintained by Sublandlord
hereunder if and to the extent such insurance would have covered such loss
or damage or (2) the amount of insurance actually carried by Sublandlord to
the extent such insurance covers such loss or damage. Inasmuch as the
aforesaid waiver will preclude the assignment of any such claim by way of
subrogation or otherwise to an insurance company or any other person,
Sublandlord agrees to give each insurance company which has issued fire and
extended coverage, personal property, property or public liability
coverage, written notice of the terms of said waiver immediately and shall
have said insurance policies properly endorsed with a waiver of
subrogation. Evidence of said waiver shall be forwarded to Subtenant upon
request.
13. COMPLIANCE WITH LAWS; NO ABATEMENT.
(a) In addition to and without limitation of Paragraph 5(a), Subtenant
shall, throughout the Sublease Term, and at Subtenant's sole cost and
expense, to the extent such obligation would otherwise be Sublandlord's
obligation under the Master Lease, promptly comply or cause compliance
with, and in any event shall not commit any act or omission within
Subtenant's control which would result in any breach or violation of, any
and all Laws including, without limitation, the Americans with Disabilities
Act, whether present or future, foreseen or unforeseen, ordinary or
extraordinary, whether or not the same shall be presently within the
contemplation of Sublandlord and Subtenant or shall involve any change of
governmental policy, or require structural or extraordinary repairs,
alterations, or additions, irrespective of the cost thereof, which may be
applicable to the Premises.
(b) Except as expressly provided in the Master Lease and provided that
Sublandlord is not in default of its obligations hereunder, no abatement,
diminution or reduction in Base Rent, Additional Rent or any other charges
required to be paid by Subtenant shall be claimed by or allowed to
Subtenant for any reason whatsoever, including but not limited to any
inconvenience or interruption, cessation, or loss of business caused
directly or indirectly by any present or future Laws including, without
limitation, the Americans with Disabilities Act, or by priorities,
rationing or curtailment of labor or materials, or by war, civil commotion,
strikes or riots, or any manner of thing resulting therefrom, or by any
other cause or causes beyond the control of Sublandlord or Subtenant, nor
shall this Sublease be affected by any such causes; and no diminution in
the amount of the space used by Subtenant caused by legally required
changes in the construction, equipment, fixtures, motors, machinery,
operation or use of the Premises shall entitle Subtenant to any abatement,
diminution or reduction of the rent or any other charges required to be
paid by Subtenant pursuant to the terms of this Sublease.
14
14. DEFAULT. For purposes of this Sublease, the Subtenant's cure periods
for a default as set forth in Section 9.1 of the Master Lease shall be reduced
as follows: (i) in the event that the Tenant under the Master Lease shall have a
period of time under the Master Lease to cure a payment of monies, Subtenant
shall have four (4) days fewer than such time period to cure a default in the
payment of any monies required to be paid hereunder after written notice of such
default from Sublandlord (provided that Sublandlord shall not be obligated to
provide such written notice if the Lessor under the Master Lease would not be
required to provide written notice of such a default); and (ii) for non-monetary
defaults, Subtenant shall have fifteen (15) days after written notice from
Sublandlord or Lessor to cure a default of any other provision of the Master
Lease or this Sublease (provided that Sublandlord shall not be obligated to
provide such written notice if the Lessor under the Master Lease would not be
required to provide written notice of such a default, and further provided that
Subtenant shall cure immediately any default involving a hazardous condition).
If Subtenant shall default in the fulfillment of any of its covenants and
agreements set forth herein or under the Master Lease (any such default being
referred to herein as a "DEFAULT"), and Subtenant shall fail to cure the default
within the aforesaid periods, Sublandlord shall have the same rights and
remedies with respect to such default as provided to Lessor under the Master
Lease. In addition to the foregoing, and not in limitation thereof, Sublandlord
shall have the right, but shall not be obligated, to cure any breach or default
of Subtenant under this Sublease, or the Master Lease, and any and all
reasonable costs incurred by Sublandlord in connection with the curing any such
breach or default, together with interest at the rate of fifteen percent (15%)
per annum or the highest rate permitted by law, whichever is lower, calculated
from the date of payment thereof by Sublandlord to the date of reimbursement
thereof from Subtenant to Sublandlord, shall become immediately due and payable
to Sublandlord.
15. NON-WAIVER. Failure of Sublandlord to declare any default immediately
upon occurrence thereof, or delay in taking any action in connection therewith,
shall not waive such default, but Sublandlord shall have the right to declare
any such default at any time and take such action in law or in equity, as might
be lawful or authorized hereunder. No waiver by Sublandlord of a default by
Subtenant shall be implied, and no express waiver by Sublandlord shall affect
any default other than the default specified in such waiver and then only for
the time and extension therein stated. All rights and remedies specifically
granted to Sublandlord herein, shall be cumulative and not mutually exclusive.
16. SURRENDER. Upon expiration of the Sublease Term, or if, at any time
prior to expiration of the Sublease Term this Sublease shall be terminated as a
result of the Subtenant's default hereunder or otherwise, Subtenant shall
immediately quit and surrender up to Sublandlord possession of the Premises, and
all of Sublandlord's furnishings and items of property therein, in the manner
and in the condition required of the surrender by the Tenant under the Master
Lease for same. Subtenant's obligation to observe or perform this covenant shall
survive the expiration or termination of this Sublease.
17. NOTICES. All notices, demands, requests, consents, approvals and other
correspondence hereunder shall be in writing and delivered or sent by (i)
personal delivery, (ii) certified or registered mail, return receipt requested,
(iii) by overnight delivery service, with all charges prepaid, or (iv) by
facsimile transmission (including, without limitation, computer generated
facsimile) with a copy sent concurrently by one of the methods described in
15
subclauses (i), (ii) or (iii) of this sentence, to the applicable party at the
facsimile numbers and the addresses set forth below:
To Subtenant: Pharma Group, Inc.
0 Xxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and: DT Industries, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Sublandlord: c/o Cable Design Technologies
Xxxxxx Plaza
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and: Mohawk/CDT
0 Xxxxxx Xxxxx
Xxxxxxxxxx , XX 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxx Xxxxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
16
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other parties complying as to delivery
with the terms of this Paragraph 17. All such notices and correspondence
shall be deemed given upon the earlier to occur of (i) actual receipt, (ii)
if sent by certified or registered mail, when received at the above
addresses or when delivery is first refused, (iii) if sent by overnight
delivery service, when received at the above stated addresses or when
delivery is refused or (iv) if sent by facsimile transmission on the date
sent if sent on a business day prior to 5:00 p.m. in the recipient's time
zone.
18. RECORDING. It shall be deemed an automatic default hereunder entitling
Sublandlord to immediately and without notice terminate this Sublease if
Subtenant should record this Sublease, or any memorandum or summary thereof.
19. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Sublease constitutes the entire agreement
of the Parties relative to the subject matter hereof, and all prior
negotiations, conversations, representations, agreements and understandings
are specifically merged herein and superseded hereby. This Sublease may be
modified only by a written instrument executed by the Parties hereto. This
Sublease is the result of the prior negotiations, conversations,
representations, agreements and understandings of the Parties and is to be
construed as the jointly prepared product of the Parties. The terms
"hereby," "hereof," "hereto," "herein," "hereunder" and any similar terms
shall refer to this Agreement, and the term "hereafter" shall mean after,
and the term "heretofore" shall mean before, the date of this Sublease.
Words of the masculine, feminine or neuter gender shall mean and include
the correlative words of other genders, and words importing the singular
number shall mean and include the plural number and vice versa. Words
importing persons shall include firms, associations, partnerships
(including limited partnerships), limited liability companies, trusts,
corporations and other legal entities, including public bodies, as well as
natural persons. The terms "include," "including" and similar terms shall
be construed as if followed by the phrase "without being limited to."
(b) SUCCESSORS AND ASSIGNS. The terms and provisions of this Sublease
shall inure to the benefit of and shall be binding upon the Parties and
their respective successors, representatives and assigns (subject to the
provisions of Paragraph 4 hereof).
(c) CONFLICT. In the event of a conflict between the terms of this
Sublease and the terms of the Master Lease as to and between the parties
hereto, the terms of this Sublease shall govern.
(d) TIME OF ESSENCE. Time is of the essence of this Sublease.
(e) GOVERNING LAW. This Sublease shall be construed in accordance with
and governed by the laws of the State in which the Premises are located.
17
(f) PARAGRAPH HEADINGS. The paragraph headings used in this Sublease
have been inserted for convenience and reference only and should not be
construed to limit or restrict the terms and provisions, covenants and
conditions hereof.
(g) SEVERABILITY. If any term or provision of this Sublease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Sublease, or the
application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each remaining term and provision of this Sublease
shall be valid and be enforced to the fullest extent permitted by law.
(h) NO RIGHT TO SHARE IN CASUALTY OR CONDEMNATION AWARDS. Subtenant
shall not have any right to any portion of the proceeds of any award for a
condemnation or other taking, or a conveyance in lieu thereof, of all or
any portion of the Premises.
(i) BROKERAGE. Each party hereby represents and warrants to the other
that it has had no dealings with any real estate broker or agent in
connection with this Sublease, excepting only The Xxxx Companies ("XXXX"),
and that it knows of no other real estate broker or agent who is or might
be entitled to a commission in connection with this Sublease. Sublandlord
acknowledges and agrees that it shall be obligated to pay Xxxx a commission
in connection with this Sublease pursuant to a separate written agreement
between Sublandlord and Xxxx. Each party agrees to indemnify, protect and
hold the other harmless from and against any and all claims inconsistent
with the foregoing representations and warranties for any brokerage,
finder's or similar fee or commission in connection with this Sublease, if
such claims are based on or relate to any act of the indemnifying party
which is contrary to the foregoing representations and warranties.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
18
[SIGNATURE PAGE ATTACHED TO SUBLEASE AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Sublease as of the date
set forth above.
SUBLANDLORD: SUBTENANT:
MOHAWK/CDT, a division of CABLE PHARMA GROUP, INC., a Delaware
DESIGN TECHNOLOGIES, INC., corporation
a Washington corporation
By: /s/ Authorized Signatory By: /s/ Authorized Signatory
---------------------------- --------------------------
Its: Its:
------------------------ -----------------------
19
EXHIBIT A
MASTER LEASE
EXHIBIT A follows this page.
