1
Exhibit 10.14
LEASE AGREEMENT
This Lease Agreement, dated the 18th day of December 2000, by and between XXXXX
X. SALAR, as he is trustee of the JMS Realty Trust under a Declaration of Trust
dated August 8, 1986 and recorded with the Essex South District Registry of
Deeds in book 8546 at page 472, having a business address at 000 Xxxxxxxxx
Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000 (hereinafter referred to as "Landlord") and
SCANSOFT, INC., a Delaware corporation, having a business address at 0
Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred to as
"Tenant")
W I T N E S S E T H:
WHEREAS, by a Lease made as of the 30th day of April 1991 (hereinafter referred
to as the "Xerox Lease") and modified by a Lease Amendment dated as of the 29th
day of March 1996 (hereinafter referred to as the "Xerox Amendment"), Landlord
leased to Xerox Corporation certain premises known as 0 Xxxxxxxxxx Xxxx Xxxxx,
Xxxx xx Xxxxxxx, Xxxxxx of Essex, Commonwealth of Massachusetts, including
37,636 rentable square feet of space in a Building more fully described in the
Xerox Lease (hereinafter referred to as the "Premises");
WHEREAS, in or about February 1999, Xerox Corporation purported to assign to
Xxxxxxx the Xerox Lease as modified, and thereafter Tenant has occupied the
Premises as a subtenant; and
Whereas Landlord and Tenant desire to enter into a new lease of the Premises
effective as of July 31, 2000, when the Xerox Lease as modified expires, subject
to the following terms and conditions;
NOW, THEREFORE, in consideration of one dollar ($1.00) and other good and
valuable consideration, paid by each party in hand to the other, the receipt and
sufficiency whereof is hereby acknowledged, Landlord and Tenant do hereby agree
as follows:
1. Except as otherwise expressly provided in this Lease Agreement, all
provisions of the Xerox Lease as modified by the Xerox Amendment
are incorporated by this reference.
2. The definitions of "Tenant" in the Xerox Lease and the Xerox
Amendment are deleted, and the above definition of "Tenant" is
substituted.
3. Paragraph 2 of the Xerox Lease and paragraph 1 of the Xerox
Amendment are deleted, and the following is substituted:
"The term of this Lease is a period of five (5) years, commencing
August 1, 2001 and ending on July 31, 2006, both dates inclusive."
4. Paragraph 3 of the Xerox Lease and paragraph 4 of the Xerox
Amendment are deleted, and the following is substituted:
"The annual rental shall be the applicable amount specified in the
following subparagraphs (a) through (d).
2
"(a) The rental for the first year of the rent shall be $395,178.00
per annum ($32,931.50 per month).
3
"(b) The rental for the second year of the term shall be computed
as of August 1, 2002 and shall be the product of the rental for the
first year of the term multiplied by the larger of the integer one
(1) or the Cost of Living Factor as defined in the following
subparagraph (d) calculated using Base Index Number from July 2000.
"(c) The rental for each of the third through the fifth years of
the term shall be computed as of the first day of each of those
years and shall be the product of the rental for the immediately
preceding year multiplied by the larger of the integer (1) or the
Cost of Living Factor as defined in the following subparagraph (d)
calculated using a Base Index Number from the month of the Current
Index Number used in the last preceding calculation of rental
hereunder.
"(d)The `Cost of Living Factor' shall be computed as follows using
the Boston Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics of the United States Department
of Labor: (i) The index number indicated in the row entitled `all
items' for the month specified in subparagraph (b) or (c)
(whichever is applicable) shall be the `Base Index Number'; and the
corresponding index number for the last month published prior to
the computation using the Cost of Living Factor shall be the
`Current Index Number'. (ii) The Cost of Living Factor shall be the
sum of the integer one (1) and the increase of the Current Index
Number over the Base Index Number expressed as a percentage. To
calculate such percentage increase, subtract the Base Index Number
from the Current Index Number and divide the difference by the Base
Index Number. (iii) If publication of the index hereinbefore
referred to shall be discontinued, computation of the Cost of
Living Factor shall thereafter be based on the most comparable
statistics published by either an agency of the United States or a
responsible financial periodical of recognized authority. In that
event, or in the event that the index ceases publishing statistics
for Boston or for `all items' or ceases publishing such figures
monthly, the method of computation hereinbefore specified shall be
equitably adjusted so as to carry out the intent of this
subparagraph as nearly as possible in the circumstances. (iv) Any
dispute between the parties concerning a claimed error in
computation of the Cost of Living Factor or the selection of
`comparable statistics' or the equitable adjustment of the method
of computation shall be resolved by arbitration pursuant to
paragraph 50."
5. The words "intentionally deleted" are deleted from paragraph 6 of
the Xerox Lease, and the following is substituted:
"SECURITY DEPOSIT
"Landlord acknowledges receipt of the sum of $100,000.00 as a
deposit to secure Tenant's diligent performance of all Tenant's
obligations hereunder. (a) On or about November 10 of each year
during the term Landlord shall pay to Tenant interest on the said
deposit together with any addition thereto (or the balance
therefore from time to time outstanding) except that if Tenant is
then in default hereunder such interest shall be likewise held by
Landlord and shall become an additional deposit. The rate of such
interest shall be the rate then paid by savings banks in the Town
of Canton on their ordinary passbook accounts. (b) Tenant shall not
in any event charge against the said deposit or interest thereon
any amount due from Tenant. However, after the end of the
4
term, if Tenant shall have surrendered the Premises in accordance
with paragraph 39 and is not otherwise in default hereunder, the
said sum of $100,000.00 together with any addition thereto (or the
balance thereof then remaining) shall be repaid to Tenant by
Landlord.
6. Without limiting the provisions of Paragraph 7 of the Xerox Lease,
Tenant agrees at its sole expense
a. as soon as practicable within the electrical room, (i) to
extend the wallboard to the underside of the ceiling structure;
(ii) to frame the door opening that allows access to the
firewall; and (iii) to make any and all changes to the overhead
electrical wiring behind this new door suggested by City &
Suburban Electric, Inc.; and
b. not later than May 15, 2001 to make all necessary repairs to
the wallboard, repaint the Premises, and, after painting,
replace any missing cove moldings.
7. Without prejudice to the provisions of paragraph 12 of the Xerox
Amendment, Tenant and Amergent, Inc. jointly and severally agree at
their sole expense
a. as soon as practicable, to provide full architect's "as built"
drawings showing the current internal floor plans of the
Building as defined in the Xerox Lease; and
b. at the end of the Term of this Lease Agreement, to restore the
Building to the floor plan configuration that was initially
submitted by Xerox Corporation and approved by Landlord insofar
as Landlord in his sale discretion shall then request, it being
understood that Landlord may selectively request certain
restoration activity while choosing to leave other areas as is.
8. Paragraph 15 of the Xerox Lease is deleted, and the following is
substituted:
"Tenant shall have the right with the prior written consent of
Landlord, which consent shall not be unreasonably withheld, to
assign this Lease or to sublease all or any portion of the
Premises, but any such assignment of subletting shall not relieve
Tenant of its obligations hereunder."
9. Paragraph 33 of the Xerox Lease is amended by deleting both
addresses for Tenant and substituting "ScanSoft, Inc., 0 Xxxxxxxxxx
Xxxxx, Xxxxxxx, XX 00000."
10. Paragraphs 5, 16 and 48 and Exhibit C of the Xerox Lease and
paragraphs 4 and 16 of the Xerox Amendment are deleted.
11. Tenant intends to request approval for three changes to the
Premises discussed by Tenant with Landlord on September 19, 2000,
namely (a) an expansion of the computer room area; (b) cubicle
office space in the `tiled floor' area of the lower floor; and (c)
construction of hard offices on the lower floor. Upon Tenant's
submission of architectural drawings, prepared at Tenant's Sole
expense, depicting those changes, Landlord will consider approval
thereof, which shall not be unreasonably withheld. If Landlord
grants approval, Tenant shall obtain the necessary municipal
approvals and permits and hire a licensed contractor to implement
these changes.
5
12. In entering into this Lease Agreement, Landlord has relied on
financial statements as of December 31, 1999 furnished by Tenant.
No later than April 15, 2001, Tenant shall furnish to Landlord
audited financial statements through December 31, 2000 together
with the most recent financial statements for the first quarter of
calendar 2001 (collectively the "2001 financials"). If Landlord is
not reasonably satisfied with Tenant's then current financial
condition as shown by the 2001 Financials, Landlord may, by written
notice received by Tenant not later than April 30, 2001, elect to
increase the required security deposit by an amount not in excess
of $300,000.00 The amount of the additional security deposit
(subject to the $300,000.00 maximum) shall be at the sole
discretion of the Landlord based upon its review of Tenant's
financials statements. Tenant shall pay the additional security
deposit to Landlord no later than May 15, 2001, and the additional
deposit shall be held pursuant to paragraph 6 of the Xerox Lease
(added by paragraph 5 of this Lease Agreement). Should Tenant fail
to remit the additional deposit by that date, Landlord may, by
written notice, elect to rescind this Lease Agreement.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease Agreement
under seal as of the day and year first above written.
Witness: THE JMS REALTY TRUST
By: /s/ Xxxxx X. Xxxxx
------------------------- -------------------------
Xxxxx X. Xxxxx, Trustee
Witness: SCANSOFT, INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------- ------------------------
President
And /s/ Xxxxxxx Xxxxxx
------------------------
CFO
