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Exhibit 10.46
SECOND AMENDMENT TO LEASE
AND EXTENSION AGREEMENT
This Second Amendment to Lease and Extension Agreement (the "Second
Amendment") is made as of this 17th day of September, 1999 by and between TIAA
Realty, Inc., (the "Landlord") a Delaware corporation and Implant Sciences
Corporation (the "Tenant").
WHEREAS, Landlord (as successor Landlord to Teachers Insurance and
Annuity Association of America) and Tenant, respectively, are the Landlord and
Tenant under a certain Lease Agreement dated as of September 29, 1995, which
Lease Agreement has been amended by that certain First Amendment to Lease and
Expansion Agreement ("First Amendment") dated July 29, 1998 (said Lease
Agreement as amended by the First Amendment is hereafter the "Lease") pursuant
to which the Tenant has leased from Landlord 21,992 rentable square feet of
space (the "Premises") in the building known as Building 1 located at 000
Xxxxxxx Xxxx, Xxxxxxxxx, XX (the "Building");
WHEREAS, the Initial Term of the Lease is scheduled to expire on May 31,
2000;
WHEREAS, subject to entering into this Second Amendment, Landlord and
Tenant have agreed to (a) extend the Initial Term by an additional period of 22
months (the "22 Month Extension") beginning on June 1, 2000 and expiring on
March 31, 2002, all as hereinafter set forth;
WHEREAS, Landlord and Tenant have agreed to enter into this Second
Amendment to reflect the foregoing and to otherwise modify and amend the Lease
reflecting the 22 Month Extension of the Initial Term and to otherwise modify
and amend the Lease, as hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Landlord and the Tenant hereby agree as follows:
1. EXTENSION OF INITIAL TERM. Effective as of the date of this Second
Amendment, the Initial Term (as extended pursuant to the First Amendment) is
hereby extended to include the period beginning on June 1, 2000 through and
including March 31, 2002 (the "22 Month Extension"), such extension to be upon
the same terms and conditions as are set forth in the Lease except as modified
by this Second Amendment.
Basic Rent payable with respect to the entire "Premises" during the 22
Month Extension shall be in the annual amount of One Hundred Ninety Seven
Thousand Nine Hundred Twenty Eight and No/100ths ($197,928.00) Dollars
payable in equal monthly installments of $16,494.00. Tenant shall
continue to pay Basic Rent allocable to the Original Premises and the 1st
Amendment Space (as those terms are defined in the First Amendment) in
the amounts and during the times specified in Section 1.2 of the Lease as
modified by Paragraph 1 of the
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First Amendment and in paragraph 2(a) of the First Amendment through May.
31, 2O00;
2. AS IS CONDITION; ALLOWANCE. Tenant hereby acknowledges that it is
presently in occupancy of the Premises and has inspected the Premises and the
common areas of the Building and, except for the Landlord's obligation to
advance the Allowance (as hereafter defined), has agreed to lease the Premises
in its current "as is, where is" condition and in its condition on June 1, 2000
with all faults and without representation or warranty by Landlord of any kind.
Landlord has agreed to provide Tenant with an allowance (the "Allowance") in the
amount of $21,992.00 which may be applied by Tenant toward (a) the cost of
alterations or improvements to the Premises (provided that Tenant shall comply
with the requirements of Article V of the Lease in making such alterations or
improvements) or (b) leasing commissions payable by Tenant in connection with
this Second Amendment. Landlord shall pay the Allowance to Tenant upon
presentation of paid invoices by Tenant evidencing that the request for payment
from the Allowance is for the purposes set forth in (a) or (b) above. Landlord
shall pay Tenant the amount evidenced by the said invoices up to the amount of
the Allowance. Landlord shall be permitted to retain any portion of the
allowance not expended by Tenant on or before September 30, 2000.
3. BROKERAGE. Tenant hereby warrants and represents to Landlord that
Tenant has dealt with no broker in connection with the consummation of this
Second Amendment other than Leggat XxXxxx Properties LLC ("Broker") and CRESA
Partners ("CRESA") and in the event of any brokerage claims against Landlord
predicated upon prior dealings with the Tenant, Tenant agrees to defend same and
to indemnify Landlord against any such claims except for any claims by Leggat
XxXxxx Properties LLC. which shall be paid by Landlord. Tenant shall be
responsible for any and all commissions due and owing to CRESA.
Landlord hereby warrants and represents that Landlord has dealt with no
broker in connection with the consummation of the matters set forth in this
Second Amendment other than Broker and CRESA. Landlord shall indemnify, defend
and hold Tenant harmless from and against any claims for brokerage commissions
predicted upon prior dealings with Landlord, except that Tenant shall be
responsible for any commissions due and owing to CRESA.
4. OPTION TO EXTEND. Effective as of the date of this Second Amendment,
Section 14.28 of the Lease (as amended by paragraph 5 of the First Amendment)
shall be deleted from the Lease in its entirety and the following new Section
14.28 shall be inserted in its place and stead, it being agreed and understood
that Tenant shall not have the right to exercise the option contained in Section
14.28 of the Lease (as amended by paragraph 5 of the First Amendment) but Tenant
shall (subject to the terms and limitations hereafter set forth) have one two
(2) year option to extend the Term of this Lease beginning on April 1, 2002 upon
and subject to the following terms and conditions:
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"14.28. OPTION TO EXTEND. Tenant shall have the right and option (the "Option"),
which said option and right shall not be severed from this Lease or separately
assigned, mortgaged or transferred, to extend the Term of this Lease for one (1)
additional consecutive period of two (2) years beginning on April 1, 2002 and
expiring on March 31, 2004 (hereinafter referred to as the "Extension Period"),
provided that (a) Tenant shall give Landlord notice of Tenant's intention to
exercise such option ("Notice of Intention") not sooner than February 1, 2001
and not later than March 31, 2001 (b) no Default of Tenant shall exist at the
time of giving the Notice of Intention or on the Revocation Date (as hereafter
defined) or on the date of commencement of the Extension Period, (c) the
Original Tenant named herein is itself occupying the entire Premises at least 30
days prior to the time of commencement of the Extension Period and (d) Tenant
shall fail to give Landlord a Revocation Notice (as hereafter defined) on or
before June 30, 2001 (the "Revocation Date"), time being of the essence of all
of the foregoing provisions. Except for the amount of Basic Rent (which is to be
determined as hereinafter provided), all the terms, covenants, conditions,
provisions and agreements in the Lease contained shall be applicable to the
additional period through which the term shall be extended as aforesaid, except
that there shall be no further options to extend the Term of the Lease nor shall
Landlord be obligated to make or pay for any improvements to the Premises nor
pay any inducement payments of any kind or nature. If Tenant shall give Landlord
a Notice of Intention in the manner and within the time period provided
aforesaid and shall thereafter fail to give Landlord a Revocation Notice in the
time and manner set forth herein, the Term of the Lease shall be extended to
include the Extension Period without the requirement of any further attention on
the part of either Landlord or Tenant. Landlord hereby reserves the right,
exercisable by Landlord in its sole discretion, to waive (in writing) any
condition precedent set forth in clauses (a), (b), (c) or (d) above.
If Tenant shall fail to give Landlord a timely Notice of Intention, Tenant shall
have no right to extend the Term of the Lease, time being of the essence of the
foregoing provisions. Any termination of this Lease shall terminate the rights
hereby granted Tenant.
The Basic Rent per annum payable during the Extension Period shall be the Fair
Market Rental Value (as said term is hereinafter defined) as of commencement of
the Extension Period but in no event less than the Basic Rent per annum plus
Escalation Charges payable for and with respect to the 12 calendar month period
immediately preceding the Extension Period. "Fair Market Rental Value" shall be
computed as of the beginning of the Extension Period at the then current annual
rental charges, including provisions for subsequent increases and other
adjustments, for the Premises as determined by Landlord in its discretion.
Landlord shall initially designate ("Landlord's Designation") the Fair Market
Rental Value for and with respect to the Extension Period by written notice to
Tenant within Thirty (30) days after Landlord's receipt of Tenant's Notice of
Intention. If Tenant does not wish to accept Landlord's Designation of the Fair
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Market Rental Value, Tenant's sole and 'exclusive remedy shall be the right, by
written notice ("Revocation Notice") given to Landlord on or before the date
which is the first to occur tiff (i) that date which is thirty (30) days after
Tenant has been notified of Landlord's Designation or (ii) the Revocation Date,
to cancel and Intention as to the Extension Period and the exercise of the
Option with respect to the Extension Period and thereupon the Term of this Lease
shall expire and come to an end without extension as of March 31, 2002 and
Tenant shall have no further options to Extend the term.
If Tenant shall fail to give Landlord a Revocation Notice within the time and
manner herein provided, time being of the essence, Tenant shall be deemed to
have accepted the Base Rent as set forth in Landlord's Designation and such
Basic Rent shall be deemed to be the Basic Rent per annum payable under this
Lease during the Extension Period and this Lease shall be deemed to be extended
to include the Extension Period at the Basic Rent per annum set forth in
Landlord's Designation. It is agreed and understood that time is of the essence
in connection with each and every provision of this Section 14.28."
5. ADDITIONAL AMENDMENTS TO LEASE. Effective as of the date of this
Second Amendment, the Lease shall be deemed amended in the following respects:
(a) Insurance. Section 1.3 of the Lease shall be deemed amended by
deleting the definition of the term "Initial Public Liability
Insurance" therefrom and inserting the following new definition in
its place and stead:
"Initial Public Liability Insurance. $1,000,000 (per occurrence)
primary liability and $4,000,000 (per occurrence) excess liability
coverage for property damage, bodily injury or death, all such
insurance to be written with companies having a Best's Insurance
Guide Rating of A- or better with a financial rating of X."
(b) Section 6.1 of the Lease is hereby amended by adding the following
new Section (d) at the end thereof:
"(d) In connection with any request by Tenant for consent to
assignment or subletting, Tenant shall first submit to Landlord in
writing: (i) the name of the proposed assignee or subtenant, (ii)
such information as to its financial responsibility and standing as
Landlord may reasonably require, and (iii) all terms and provisions
upon which the proposed assignment or subletting is to be made. Upon
receipt from Tenant of such request and information, the Landlord
shall have an option (sometimes hereinafter referred to as the
"option" or "Take Back Option") to be exercised in writing within
thirty (30) days after its receipt from Tenant of such request and
information, if the request is to assign the Lease or to sublet all
of the Premises, to cancel or terminate this Lease, or, if the
request is to sublet a portion, of the Premises only, to cancel and
terminate this Lease with respect to such portion, in each case, as
of the date set forth in Landlord's
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notice of exercise of such option, which shall be not less than
sixty (60) nor more than one hundred twenty (120) days following the
giving of such notice; in the event Landlord shall exercise such
option, Tenant shall surrender possession of the entire Premises, or
the portion which is the subject of the option, as the case may be,
on the date set forth in such notice in accordance with the
provisions of this Lease relating to surrender of Premises at the
expiration of the Term. If this Lease shall be cancelled as to a
portion of the Premises only, Basic Rent and Escalation Charges
shall thereafter be abated proportionately according to the ratio
the number of square feet of the portion of the space surrendered
bears to the size of the Premises. As additional rent, Tenant shall
reimburse Landlord promptly for reasonable legal and other expenses
incurred by Landlord in connection with any request by Tenant for
consent to assignment or subletting.
If Landlord shall not exercise its option pursuant to the foregoing
provisions, Landlord will not unreasonably delay or withhold its
consent to the assignment or subletting to the party referred to
upon all the terms and provisions set forth in Tenant's notice to
Landlord, provided that the terms and provisions of such assignment
or subletting shall specifically make applicable to the assignee or
sublessee all of the provisions of this Article VI of the Lease so
that Landlord shall have against the assignee or sublessee all
rights with respect to any further assignment or subletting which
are set forth in Article VI of the Lease as amended hereby except
that no such assignee or sublessee shall have any right to further
assign or sublet the Premises. In any case involving an assignment
of this Lease or a subletting, Landlord shall be entitled to receive
45% of all Subleasing Overages (as said term is hereinafter
defined). As used herein, the term "Subleasing Overages" shall mean,
for each period in question, all amounts received by Tenant in
excess of Basic Rent and Escalation Charges and other items of
additional rent reserved under this Lease attributable to the space
sublet (including, without limitation, all lump sum payments made in
connection therewith).
Any such assignment or subletting shall nevertheless be subject to
all the terms and provisions of Article VI. No assignment shall be
binding upon Landlord or any of Landlord's mortgagees, unless Tenant
shall deliver to Landlord an instrument in recordable form which
contains a covenant of assumption by the assignee running to
Landlord and all persons claiming by, through or under Landlord. The
failure or refusal of the assignee to execute such instrument of
assumption shall not release or discharge the assignee from its
liability as Tenant hereunder. In addition, Tenant shall furnish to
Landlord a conformed copy of any sublease effected under terms of
this Article VI. In no event shall the Tenant hereunder be released
from its liability under this Lease.
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Landlord shall not be deemed unreasonable in refusing to approve a
sublease wherein the rent is, in the reasonable judgment of
Landlord, at rates which are below market for the Premises or
Building or where such proposed subtenant is a tenant of the
Building and Landlord has substantially similar space available for
leasing in the Building."
(c) The last grammatical sentence of Section 14.19 which begins with the
words "The Landlord may, but shall not be required..." and ends with
the words "... set forth in this Section 14.19." is hereby deleted
from the Lease in its entirety.
(d) Section 14.22 of the Lease entitled "Substitute Space" is hereby
deleted from the Lease in its entirety.
6. GENERALLY. Except as modified herein, all of the terms, covenants,
provisions and conditions contained in the Lease remain in full force and effect
and are hereby ratified and affirmed.
WITNESS our hands and seals on the day and year first above written.
LANDLORD: TENANT:
TIAA Realty, Inc., a Delaware Implant Sciences Corporation
corporation, as Landlord
By: Teachers Insurance and By: /s/ X.X. Xxxxxx
Annuity Association of America, ------------------------------
a New York corporation
Its: Authorized Representative Its: President
9/17/99
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Its: Director
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