EXHIBIT 10.11
XXXXXXXX GROUP LLC
COMMERCIAL LEASE ADDENDUM
A. LESSEE OBLIGATIONS
1. LESSEE shall not change the color or appearance of the outside of the
Leased Premises except upon the prior written consent of the LESSOR. However,
LESSEE may install its own emergency power generator to the exterior rear of the
building.
2. LESSEE shall not post signs on or about the Premises without LESSOR's
prior approval, however LESSEE shall be entitled to reasonable signage to be
erected at LESSEE's own cost and expense, and in compliance with any relevant
municipal regulations.
3. The parking areas shall not be used for storage of unused, damaged or
unregistered vehicles, nor shall the LESSEE store merchandise or other materials
in the parking areas.
4. LESSEE shall not otherwise store vehicles, containers, or refuse
outside the Leased Premises, except for routine parking of vehicles and delivery
or pickup of products or materials.
5. XXXXXX shall be responsible to dispose of LESSEE trash and refuse.
6. The LESSEE may maintain insurance required by this Lease under a
blanket policy of insurance which insures the LESSEE and any affiliates of the
LESSEE.
7. No animals, reptiles or pets of any kind shall be kept in or about the
building, except for research purposes in accordance with applicable laws and
regulations.
X. XXXXXX OBLIGATIONS
1. LESSOR shall, at its own cost and expense, maintain in good condition
and repair all structural components of the building containing the Leased
Premises, including the foundation, floor, loadbearing walls, exterior walls,
HVAC, plumbing and electrical service, roof, common area, if any, of the
Building, landscaping, parking areas and access ways.
2. LESSOR shall remove snow and ice from the access roadway, the parking
areas, and the walkways, which serve the building, provide exterior lighting,
and LESSOR will remove snow or ice from the roof of the building if, as and when
the conditions cause roof leakage or threaten ice falls over access ways.
3. LESSOR shall maintain with insurance companies, licensed in
Massachusetts, all risk fire insurance policies with extended coverage insuring
the property containing the Leased Premises against loss or damage caused by
fire or casualty in an amount equal to the full replacement cost of the
Building.
C. SUBLEASING PROVISION
The following provisions supplements the provisions of Section 13,
"Assignment-Subleasing" above.
(i) The LESSOR shall be deemed to approve any assignment or sublease to a
parent, subsidiary or affiliate of the LESSEE upon written assurance by LESSEE
that the subsequent use will be in conformance with and subject to section 8,
above, "USE OF LEASED PREMISES".
(ii) Provided that LESSEE pays all rent and other charges under this Lease,
LESSEE shall have a right to sub lease or assign with approval of the LESSOR,
and shall be entitled to all rents received up to the value of rent payable
under this Lease, and the parties will share equally in any rental income
realized in such an assignment or sublease which is in
excess of the rent under this lease. The LESSEE shall bear all costs or expenses
of such sub leasing or assignment.
(iii) In the event the LESSEE seeks approval for sub lease or assignment for
the entire premises, the LESSOR shall have the right to refuse approval for the
purposes of recovering possession of the Leased Premises, in which case, if the
LESSEE elects to vacate, the Lease term shall be deemed to expire at a mutually
agreed date.
D. MARKET RATE RENT FOR EXTENSION OPTIONS
Upon receipt of written notice from the LESSEE of intent to extend, under
Section 25(b) of the Lease, LESSOR shall respond within thirty days with a
quotation for market rate rent. For this purpose "market rate" shall mean the
rate for Class B office space in comparable buildings in the general area, and
not for space with the specialized improvements installed by the LESSEE (the
parties agreeing that LESSEE shall not be charged rent for or with respect to
any laboratory, biotechnological, specialized or trade improvements which LESSEE
make to the Leased Premises at LESSEE's own expense). Fair market rate shall
reflect the provisions of this Lease for escalation of real estate taxes,
operating costs and for utility charges. The LESSEE shall respond within thirty
(30) days agreeing to the quotation, rejecting the extension or requesting third
party determination of market rate. In the later event each party shall then
appoint a realty broker who has at least ten years experience in commercial real
estate brokerage and/or appraisal in the Greater Boston area, and who is
familiar with similar commercial property in the Lexington area, they shall
confer, and each shall recommend a market rate by writing to the parties. In the
event their recommendations are joint or equal, this shall be market rate. If
the recommendations differ by 5% or less, their average shall be deemed market
rate. In the event their rates differ by a greater amount they shall jointly
nominate a third such broker who shall make an independent recommendation of
market rate. The two closest of the three recommendations shall then be
averaged to establish the market rate. Each party hereto shall pay the expense
of its nominee broker, and each shall share equally the expense of a third, if
required. However, in no event shall market rate, determined as aforesaid, be
less than the rate then payable at the time of exercise of the option, by the
LESSEE. The Market Rate shall be binding on both parties and shall be reflected
in a Lease amendment.
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EXHIBIT B.
BUILDOUT OBLIGATIONS
X. XXXXXX'x OBLIGATIONS
The LESSOR shall deliver the Leased Premises, on or before December 1, 1997, in
conformance with plans and specifications agreed between the parties with
respect to the layout and location of offices, rooms, corridors, lighting,
bathrooms, plumbing, electrical services, floors, dock area and climate
controls, as referenced in Exhibit A. ("Tenant Improvements"). The LESSOR shall
deliver the premises completed, upon issuance of a Certificate of Occupancy,
free and clear of all tenants or occupants, and in compliance with local laws,
building codes and regulations. In event "Punch List" items remain to be
completed, such as touch up paint, adjustments to doors etc., the LESSOR shall
complete these items within ten days of the Commencement Date.
In the event, through no delay or fault of XXXXXX, the LESSOR fails to deliver
the premises by December 1, 1997 XXXXXX agreed to share one half of the penalty
in rental premium suffered by the LESSEE, due to hold over beyond November 30,
1997 in the lease of premises at Natick, up to Five Thousand ($5,000.00). If
payable that amount will be credited to LESSEE upon occupancy.
In the event the premises are suitable for occupancy prior to December 1, 1997,
XXXXXX may have use and occupancy of the premises upon that Commencement Date.
In that event rent will commence on December 1, 1997.
The Building, rest rooms and common areas, shall be in compliance with the
Americans with Disabilities Act of 1990, as amended. LESSOR shall remedy any
deficiencies in the building systems or in the Tenant Improvements at its sole
cost, promptly following receipt of notice of any deficiency.
LESSOR shall afford LESSEE access to the premises prior to the Commencement Date
for the purpose of installing cabling, telephone lines and equipment, subject to
the prior conditions that such access shall not interfere with or impede the
LESSOR's work on Tenant Improvements, and such LESSEE work shall comply with
schedules and in a manner agreed with the LESSOR's supervisor on site.
In the event that the LESSOR fails to deliver the premises for occupancy by the
LESSEE prior to January 1, 1998, due to no fault or delay by XXXXXX, the LESSEE
may upon ten days written notice cancel this Lease Agreement without penalty or
further obligation on either party.
X. XXXXXX's OBLIGATIONS
LESSEE shall be responsible to provide architectural plans for the layout,
design and specifications for construction of all tenant improvements and to
obtain LESSOR's prior approval of such layout and design. Specifications for the
kind, type and quality of material and finish shall be consistent with the kind,
type and quality of materials and finish installed in the leased premises of
Spectrum Medical Technologies, Inc. at 00 Xxxxxxxx Xxx. Lexington.
In the event of changes in layout or specification by the LESSEE, such changes
shall be defined in plans submitted to the LESSOR. In the event such changes
would result in either delay in work completion or increase in costs of buildout
LESSOR shall notify LESSEE, in writing, within five business days, and XXXXXX
may accept the delay or charges, or waive the changes, in writing, within three
business days.
C. SPECIAL PROVISION FOR FINANCING
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LESSEE may from time to time grant security interests in or make equipment
leases with respect to LESSEE's current or future installations, fixtures,
equipment, improvements, additions and property in the Leased Premises in order
to finance the same or LESSEE's business, and LESSOR shall upon XXXXXX's request
execute and deliver reasonable instruments confirming the same.
EXHIBIT C
CLEANING SCHEDULE
INTENTIONALLY OMITTED FROM THIS LEASE
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EXHIBIT D.
RIGHT OF FIRST REFUSAL ON ADDITIONAL SPACE
INTENTIONALLY OMITTED FROM THIS LEASE
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EXHIBIT E
EXCLUSIONS FROM OPERATING COSTS
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The following items shall be excluded in computing LESSEE'S share of Operating
costs applicable to the Leased Premises:
1. Any ground lease rental;
2. Costs of capital repairs or capital replacements (except as
specifically permitted in this paragraph 2), capital improvements and equipment;
except those: (a) required by laws enacted on or after the date the temporary
certificate of occupancy issued for the LESSEE work shall be validly issued with
the cost of any such improvements and equipment depreciated or amortized over
the usual life of the improvement and/or equipment, or (b) installed at the
Leased Premises to reduce operating costs, with the cost of any such
improvements and equipment depreciated or amortized at an annual rate reasonably
calculated to equal the amount of operating costs to be saved in each calendar
year throughout the term (as determined at the time LESSOR elected to proceed
with the capital improvement or acquisition of the capital equipment to reduce
operating costs); however, as respects (a) and (b) above, only depreciation or
amortization attributable to a given calendar year shall be included in
operating costs for such year. Depreciation or amortization shall be calculated
on straight line basis and at interest rates calculated at market rates and
terms then prevailing for borrowers similar to LESSOR.
3. Rentals for items (except when needed in connection with normal
repairs and maintenance of the building which shall be permitted) which if
purchased, rather than rented, would constitute a capital improvement
specifically excluded in Subsection 2, above;
4. Costs incurred by LESSOR for the repair for replacement of damage to
the building or its contents caused by fire or other casualty;
5. Depreciation, amortization, lender's fees and interest payments except
as permitted pursuant to Subsection 2, above, and, if permitted, then determined
in accordance with generally accepted accounting principles, consistently
applied (as applied to commercial real estate) in accordance with the
anticipated useful life of such item (as reasonably determined by XXXXXX);
6. Overhead and profit increments paid to LESSOR or to subsidiaries or
affiliates of LESSOR for goods and/or services in the building to the extent the
same exceeds the cost of such goods and/or services rendered by unaffiliated
third parties on a competitive basis;
7. Advertising and promotional expenditures, and the costs of acquiring
and installing signs in or on the building identifying the owner of the
building;
8. Interest, principal, points and fees on debts or amortization on any
mortgage or mortgages or any other debt instrument encumbering the building or
property;
9. Any costs associated with gift taxes, excise taxes, income taxes,
transfer taxes or capital levies;
10. Costs incurred in connection with upgrading the building to comply
with handicap, hazardous material, fire and safety codes which were in effect
prior to the date of the lease or which become effective after date of the
Lease;
11. Tax penalties incurred as a result of XXXXXX's negligence, inability
or unwillingness to make payments when due, not attributable to LESSEE's failure
to make payments to LESSOR for such items in accordance with the lease;
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12. Any and all costs arising from the presence of hazardous materials or
substances (as defined by applicable Federal, Massachusetts and local laws) now
or hereafter pertaining to the building ("Hazardous Substances") and property in
or about the building including, without limitation, Hazardous Substances in the
ground, water, or soil;
13. XXXXXX's general corporate overhead and general and administrative
expenses except as contained and allowed in the 5% Management Fee per provision
in Clause 6.B, above;
14. Costs of any items for which XXXXXX is reimbursed by insurance, or
otherwise compensated by parties other than LESSEE's of the building;
15. Any legal fees associated with the sale or refinancing of the
building;
16. Costs for any separate utility meters LESSOR may install in the
building, unless the installation is required by a utility company or
governmental entity;
17. Costs for construction for compliance with, or penalties assessed for
non-compliance with the Americans with Disabilities Act of 1990 (42. U.S.C.
1281-1283);
18. Expenses incurred as a result of the LESSOR's negligence or the
negligence of another lessee;
19. Costs of procuring tenants for the building, including without
limitation advertising, brokerage commissions and inducements paid or credited
to such tenants for buildout costs;
20. Costs for special work or services to particular tenants.
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