EXHIBIT 10.15
Sublease
This Sublease is made as of this 28th day of June, 1999, between Xxxxxxx
Kodak Company, a New Jersey corporation, having an office at 000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000, hereinafter called "Sublandlord" and Data Return
Corporation, a Texas corporation, having an office at 000 Xxxxxxx Xxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxx 00000, hereinafter called "Subtenant".
Witnesseth:
Whereas, by a certain Lease dated as of September 16, 1996 (the "Prime
Lease") Sublandlord leases from 114 Millennium, Ltd., successor-in-interest to
HMS Office, L.P. (the "Prime Landlord") approximately 22,663 net rentable square
feet of space on the fourth (4th) floor in the building known as Millennium
Center - East Tower, located at 000 Xxx xxxxxxx Xxxxxxxxx in Irving, Texas
(herein called the "Building"). The Prime Lease was amended by a certain First
Amendment to Lease Agreement dated as of February 24, 1997 (the "First
Amendment") which added certain additional space in the basement of the Building
and on the 10th floor of the Building, to the premises originally leased by
Sublandlord in the Prime Lease, but such additional space has been eliminated
from the terms of the Prime Lease and the First Amendment is of no further force
and effect; and
Whereas, Subtenant desires to sublease certain premises from Sublandlord.
Now, Therefore, for and in consideration of the foregoing and for other
good and valuable consideration and of the mutual agreements hereinafter set
forth, Sublandlord and Subtenant stipulate, covenant and agree as follows:
1. Premises. Sublandlord does hereby sublease to Subtenant all of the
Leased Premises under the Prime lease, which Leased Premises are a portion of
the Building consisting of approximately 22,663 square feet of rentable area on
the fourth (4th) floor of the Building (the "Premises") as outlined on Exhibit
"A" which is attached hereto and made a part hereof.
2. Term. The term of this Sublease shall commence on the later to occur of
(a) July 1, 1999; or (b) the date on which the Required Improvements (as defined
in Paragraph 6 herein) have been completed and the consent of Prime Landlord to
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this Sublease has been received (the "Commencement Date") and shall expire on at
5:00 p.m. on October 31, 2001, unless sooner terminated. If the Commencement
Date has not occurred by September 1, 1999, then Subtenant may terminate this
Sublease upon written notice delivered to Sublandlord at any time prior to the
Commencement Date.
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3. Uses.
(a) By Subtenant. Subtenant shall use and occupy the Premises for
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general office purposes, but subject expressly, however, to the same limits
imposed on Sublandlord under the Prime Lease.
(b) By Sublandlord. Until the Rent Commencement Date (as hereinafter
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defined), Sublandlord's employees shall have the right to occupy approximately
1,400 square feet of the Premises, which occupancy shall be shared with
Subtenant and its employees. Sublandlord shall pay no rent for such occupancy
unless it fails to vacate the Premises on or before the Rent Commencement Date
in which case the monthly installments of Base Rent to be paid by Subtenant for
the use of the Premises beginning on the Rent Commencement Date shall be reduced
by $0.0507 for each square foot of space occupied by Sublandlord's employees for
each day of occupancy beyond the Rent Commencement Date. Sublandlord shall use
reasonable efforts to fully vacate the Premises on or before the Rent
Commencement Date.
4. Rent. Beginning on the Commencement Date of this Sublease and continuing
through the later to occur of either: (a) two (2) months following the
Commencement Date; or (b) September 1, 1999, (such later date being called the
"Rent Commencement Date"), Subtenant shall pay no annual base rent for its use
of the Premises. Thereafter, beginning on the Rent Commencement Date and
continuing throughout the term of this Sublease, Subtenant shall pay Sublandlord
annual base rent (the "Base Rent") of Four Hundred Nineteen Thousand Two Hundred
Sixty-Five and 50/100 Dollars ($419,265.50) payable in equal monthly
installments of Thirty-Four Thousand Nine Hundred Thirty-Eight and 79/100
Dollars ($34,938.79) each. Rent for any portion of a month shall be prorated on
a thirty (30) day basis. Rent payments will be delivered to Sublandlord's office
located at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attention: Corporate
Real Estate Office, or such other place as Sublandlord may designate.
5. Additional Rent. It is understood that the Base Rent to be paid by
Subtenant hereunder shall not be subject to any Base Rental Adjustment pursuant
to the terms of Sections 3.2(b), 3.2(c), 3.2(d) and 3.2(e) of the Prime Lease.
However, if Sublandlord is charged any additional rent due to additional
services, air-conditioning, ventilating and heating at times other than Building
Operating Hours (as defined in the Prime Lease), additional cleaning and
janitorial services or otherwise pursuant to any other sections of the Prime
Lease, such additional rent shall be paid entirely by Subtenant promptly
following demand for same by Sublandlord.
6. Preparation for Occupancy. Except as otherwise provided expressly
herein, as of the Commencement Date, Subtenant shall accept the Premises in its
then "as is" condition, in broom clean condition. Prior to the Commencement
Date, Sublandlord shall be required to make certain improvements to the Premises
(collectively, the "Required Improvements") which shall include only the
following: (a) all furniture and other personal property of Sublandlord which
Sublandlord intends to remove, shall have been removed from the Premises; (b)
all telephone and data systems which Sublandlord intends to remove, shall have
been removed from the Premises; and (c) access control system documentation
relating to the Premises shall have been delivered to
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Subtenant. Sublandlord shall not be required to perform tenant improvements of
any kind or nature, and all such improvements and the performance thereof shall
be subject to the provisions of this Sublease and the Prime Lease.
Notwithstanding the foregoing, Subtenant shall not be liable for, and Subtenant
shall not be deemed to have waived by taking possession of the Premises or
otherwise, any violations of applicable laws (including applicable laws
pertaining to health and the environment) or restrictive covenants or other
encumbrances relating to the Building that: (i) occurred in whole or in part
prior to the date hereof, including any violation continuing as of the date
hereof; or (ii) result in whole or in part from the failure of the Building or
the property upon which it is located (as opposed any particular operation or
conduct of Subtenant in the Premises which may violate applicable laws or other
provisions of this Sublease) to comply with applicable laws or restrictive
covenants or other encumbrances (excluding, however, any such failure that is
caused by alterations to the Building made by Subtenant); or (iii) result in
whole or in part from the presence, release or disposal of asbestos or other
hazardous materials on or from the Building or the land upon which it is
located, excluding only hazardous material placed on the property by Subtenant
or its agents, employees or representatives. Further, Subtenant shall have no
liability to correct any violation of environmental laws or to indemnify
Sublandlord for any violation of environmental laws unless such violation was
caused by Subtenant's placement of hazardous materials in the Premises or by the
placement of such hazardous materials in the Premises by Subtenant's agents,
employees or representatives.
7. INCORPORATION OF PRIME LEASE.
(a) Subordination to Prime Lease. This Sublease is subject and
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subordinate to the Prime Lease. Except as otherwise specifically provided
herein or as may be inconsistent with the terms hereof, all of the terms,
covenants and conditions with which Sublandlord is bound to comply under the
Prime Lease shall, to the extent only that they apply to the Premises, be
binding upon Subtenant, and all of the obligations of Prime Landlord set forth
in the Prime Lease shall, to the extent that they apply to the Premises, inure
to Subtenant's benefit. In the case of any breach of this Sublease by
Subtenant, Sublandlord shall have all the rights against Subtenant as would be
available to the Prime Landlord against Sublandlord under the Prime Lease if
such breach of the Prime Lease were by the Sublandlord. It is the intention of
the parties that, except as otherwise provided in this Sublease, the
relationship between Sublandlord and Subtenant shall be governed by the language
of the various articles of the Prime Lease as if they were typed out in this
Sublease in full, and for that purpose the words "Landlord", "Tenant" and
"Lease" as used in the Prime Lease, shall read, respectively, "Sublandlord",
"Subtenant" and "Sublease".
(b) Deletions; Modifications. For the purposes of this Sublease, the
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following provisions of the Prime Lease are hereby deleted or modified as
follows:
(i) Deletions: Delete the following:
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A. Section 2.3 entitled "Leasehold Improvements";
B. Section 3.2(b) relating to "Base Rental
Adjustment";
C. Section 3.2(c) relating to "Basic Costs";
D. Section 3.2(d) relating to Annual Reconciliation
payment;
E. Section 3.2(e) relating to certain "gross ups";
F. Section 4.9 entitled "Satellite Communication
Dish";
G. Section 7.1 entitled "Renewal Option";
H. Section 7.2 entitled "Conversion Option";
I. Exhibit C-1 entitled "Tenant Improvements Work
Schedule";
J. Exhibit C-4 entitled "Critical Date Schedule";
K. Exhibit F entitled "Non-Disturbance, Attornment
and Subordination Agreement";
L. Exhibit J entitled ":License Agreement"; and
M. Exhibit K entitled "OI Lease Provisions."
(ii) Modifications: Modify the following:
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A. Section 2.1 entitled "Term" in accordance with
the provisions of Paragraph 2 herein;
B. Section 3.1 entitled "Rental Payments" and
Section 3.2(a) entitled "Base Rental" in
accordance with the provisions of Paragraph 4
herein.
C. Section 3.3 entitled "Security Deposit" in
accordance with the provisions of Paragraph 13
herein;
D. Section 4.4 entitled "Graphics" in accordance
with the provisions of Paragraph 17 herein;
E. Section 5.5(a) relating to "Alterations,
Additions and Improvements" to require
Sublandlord's consent in addition to the consent
of Prime Landlord and to delete subsection (3)
therein such that all alterations, additions and
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improvements will require the consent of
Sublandlord and, to the extent required by the
terms of the Prime Lease, the consent of Prime
Landlord;
F. Section 5.10 entitled "Subordination" such that
no Non-Disturbance Agreement (as defined therein)
will be provided to Subtenant.
G. Section 6.11 entitled "Casualty Insurance:"
and .12 entitled "Liability Insurance" to name
Sublandlord as an additional insured on all
insurance policies of Subtenant; and
H. Section 6.17 entitled "Notices" in accordance
with the provisions of Xxxxxxxxx 0 xxxxxx.
(xxx) Representation Regarding Prime Lease. Sublandlord
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hereby represents and warrants that a true and correct copy of the Prime Lease
is attached hereto as Exhibit B, which exhibit is incorporated herein.
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8. Quiet Enjoyment; No Forfeiture.
(a) Quiet Enjoyment. Sublandlord covenants and agrees with Subtenant
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that upon Subtenant paying the rent and additional rent reserved in this
Sublease and observing and performing all of the other obligations, terms,
covenants and conditions of this Sublease on Subtenant's part to be observed and
performed, Subtenant may peaceably and quietly enjoy the Premises during the
term; provided, however, that this Sublease shall automatically terminate upon
termination of the Prime Lease. Sublandlord shall not during the term of this
Sublease exercise any right or remedy under the Prime Lease to cause the
termination of the Prime Lease with respect to the Premises, nor shall
Sublandlord do or permit anything to be done which would constitute a default
under the Prime Lease nor shall Sublandlord voluntarily agree to any such
termination of the Prime Lease. Sublandlord will indemnify and hold harmless
Subtenant from and defend Subtenant against all claims, liabilities, losses and
damages of any kind whatsoever (excepting special and consequential damages)
that Subtenant may incur by reason of, resulting from or arising out of any such
cancellation, termination or forfeiture. In the event of any default by
Sublandlord under the Prime Lease, Sublandlord shall use its best efforts to
cure such default in such a manner as to avoid the termination of the Prime
Lease.
(b) No Forfeiture. Subtenant covenants and agrees that Subtenant shall
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not do or suffer or permit anything to be done which would constitute a default
under the Prime Lease or would cause the Prime Lease to be canceled, terminated
or forfeited by virtue of any rights of cancellation, termination, or forfeiture
reserved or vested in Prime Landlord under the Prime Lease, and that Subtenant
will indemnify and hold harmless Sublandlord from and defend Sublandlord against
all claims, liabilities, losses and damages of any kind whatsoever (excepting
special and consequential damages) that Sublandlord may incur by reason of,
resulting from or arising out of any such cancellation, termination or
forfeiture.
(c) No Amendment. Sublandlord shall not amend or modify the Prime
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Lease or waive any rights of Sublandlord under the Prime Lease with respect to
the Premises without the prior written consent of Subtenant. Sublandlord
represents and warrants that, to the best of its knowledge, no default exists
under the Prime Lease, and no event which with the giving of notice or the
passage of time would result in a default, exists under the Prime Lease.
(d) Waiver of Subrogation. By its consent hereto, Prime Landlord
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agrees that the waiver and release by Prime Landlord set forth in Section 6.14
of the Prime Lease (Waiver of Subrogation) shall be binding on Prime Landlord as
to Subtenant and Subtenant agrees that the waiver and release by Sublandlord in
Section 6.14 of the Prime Lease (Waiver of Subrogation) shall be binding on
Subtenant as to the Prime Landlord.
9. Notices. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in regard to this
Sublease will be validly given, made or served, if in writing and delivered
personally, sent by nationally recognized overnight delivery service, or sent by
United States certified mail, postage prepaid, return receipt requested, if to:
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Xxxxxxx Kodak Company
Corporate Real Estate
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attention: Lease Management Office.
Prior to the Rent Commencement Date: After the Rent Commencement Date:
Data Return Corporation Data Return Corporation
000 Xxxxxxx Xxxxx, Xxxxx 000 000 X. Xxx Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxx, Director of Attention: Xxxxxx Xxx, Director of
Operations Operations
or to other such addresses as either party may, from time to time, designate
in writing delivered in a like manner. Any such notice or communication shall be
deemed to have been given either at the time of personal delivery or, in the
case of delivery service or mail, as of the date of first attempted delivery at
the address and in the manner provided herein.
10. Assignment and Subletting. Subtenant agrees that it shall not
assign, mortgage, transfer, pledge or encumber its interest in this Sublease, in
whole or in part, or sublet or permit the subletting of the Premises, or permit
the Premises or any part thereof to be occupied or used by any person or entity
other than Subtenant, in each case without first obtaining the prior written
consent of Sublandlord, which consent Sublandlord will not unreasonably withhold
or delay. No such assignment or sublease shall operate to release Subtenant from
its obligations under this Sublease. Failure of Sublandlord to obtain the
consent of Prime Landlord, if required, or submission by Subtenant of a proposed
assignee or subtenant who, in the opinion of Sublandlord reasonably exercised,
is a competitor of Sublandlord shall in each case be a reasonable and conclusive
basis for withholding consent.
Notwithstanding the foregoing, Subtenant shall be entitled to
re-incorporate in the State of Delaware and transfer this Sublease and all other
assets of Subtenant to such newly incorporated entity. Sublandlord hereby
consents to such transfer, and Prime Landlord, by its consent hereto, shall be
deemed to have consented to such transfer. Further notwithstanding the foregoing
or anything in the Prime Lease to the contrary, a change in stock ownership of
Subtenant pursuant to an initial public offering shall not be an assignment of
this Sublease and shall be permitted hereunder and under the Prime Lease.
11. Prime Landlord's Responsibilities. Subtenant recognizes that
Sublandlord is not in position to furnish the services set forth in the Prime
Lease, obtain an agreement of non-disturbance or to perform certain other
obligations which are not within the control of Sublandlord, such as, without
limitation, maintenance, repairs and replacements to the Building and the
Premises, compliance with laws, and restoration of the Premises and the Building
after casualty or condemnation. Therefore, notwithstanding anything to the
contrary contained in this Sublease, Subtenant agrees that Subtenant shall look
solely to Prime Landlord to furnish all services and to perform all obligations
agreed upon by Prime Landlord under the Lease to furnish
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and perform. Sublandlord shall not be liable to Subtenant or be deemed in
default hereunder for failure of Prime Landlord to furnish or perform the same.
However, whenever under the terms of the Prime Lease, Prime Landlord shall fail
to perform any of its Prime Lease obligations pertaining to the Premises,
Sublandlord will, upon the written request of Subtenant, use its reasonably
diligent good faith efforts to enforce the Prime Lease and obtain Prime
Landlord's compliance with its obligations thereunder. Additionally, Subtenant
may, at its option, enforce Prime landlord's performance of the Prime Lease if
and to the extent authorized by the terms of the Prime Lease, and Sublandlord
shall cooperate with Subtenant in such enforcement.
12. CASUALTY AND CONDEMNATION. Section 6.5, entitled "Casualty" and
Section 6.1, entitled "Condemnation", of the Prime Lease are modified to provide
that if by operation of either of these two sections the Prime Lease is not
terminated and continues in full force and effect, this Sublease shall not be
terminated but shall also continue in full force and effect, except that until
the Premises are restored in accordance with these two sections there shall be a
proportionate abatement of annual rent and additional rent payable hereunder to
the extent of damage to the Premises as determined by Prime Landlord,
Sublandlord and Subtenant; provided, however, that such abatement shall in no
event exceed the abatement granted to Sublandlord under the Prime Lease for the
Premises and, provided further, that no compensation or claim or reduction will
be allowed or paid by Sublandlord by reason of inconvenience, annoyance or
injury to Subtenant's business arising from the necessity of effecting repairs
to the Premises or any portion of the Building, whether such repairs are
required by operation of these two sections or any other provision of the Prime
Lease. Sublandlord acknowledges that it shall not exercise any termination
rights under Section 6.5 and Section 6.1 of the Prime Lease without Subtenant's
prior written consent, and if requested by Subtenant to exercise such
termination rights, Sublandlord shall do so. Further, in the event of a
condemnation with renders the remaining portion of the Premises insufficient in
Subtenant's reasonable opinion, for the conduct of Subtenant's business therein,
Subtenant shall have the right to terminate this Sublease by delivering written
notice to Sublandlord within thirty (30) days after the occurrence of the taking
or condemnation or sale in lieu thereof. Notwithstanding anything to the
contrary in the Prime Lease, in the event a fire or other casualty renders the
Premises insufficient in Subtenant's reasonable opinion for the conduct of
Subtenant's business therein and such condition is reasonably anticipated to
continue for a period of one hundred twenty (120) days after the occurrence of
the fire or other casualty, Subtenant shall have the right to terminate this
Sublease by delivering written notice to Sublandlord within sixty (60) days
after the occurrence of the casualty. In the event of a fire or other casualty
which damages the Premises, Subtenant shall not be obligated to rebuild or
restore any leasehold improvements existing in the Premises on the Commencement
Date, and provided that this Sublease is not terminated as provided herein,
Sublandlord shall rebuild such leasehold improvements to the condition which
existed immediately prior to such fire or other casualty within sixty (60) days
after Prime Landlord's delivery of the Premises to Sublandlord.
13. SECURITY DEPOSIT. Subtenant has paid Sublandlord on the execution and
delivery of this Sublease the sum of SIXTY NINE THOUSAND EIGHT HUNDRED SEVENTY
SEVEN DOLLARS AND 58 CENTS ($69,877.58) as security for the full and faithful
performance of the terms, covenants and conditions of this lease on Subtenant's
part to be performed or observed,
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including but not limited to payment of rent and additional rent in default or
for any other sum which Sublandlord may expend or be required to expend by
reason of Subtenant's default, including any damages or deficiency in reletting
the demised Premises, in whole or in part, whether such damages shall accrue
before or after summary proceedings or other re-entry by Sublandlord. If
Subtenant shall fully and faithfully comply with all the terms, covenants and
conditions of this Sublease on Subtenant's part to be performed or observed, the
security, or any unapplied balance thereof, shall be returned to Subtenant after
the time fixed as the expiration of the demised term and after the removal of
Subtenant and surrender of possession of the demised Premises to Sublandlord.
14. SUBLANDLORD'S AND SUBTENANT'S RIGHTS TO REMEDY DEFAULTS. Sublandlord
shall have the right, but shall not be obligated, to correct or remedy any
default on the part of Subtenant under any provision of the Sublease or the
Prime Lease (to the extent applicable to the Subtenant under the terms hereof)
in respect of the Premises. Subtenant agrees that in the event Sublandlord
shall correct or remedy any such default after the cure period therefor,
Subtenant shall pay to Sublandlord the reasonable cost thereof, including
reasonable expenses and attorney's fees, upon written demand therefor.
Subtenant shall have the right, but shall not be obligated, to correct or remedy
any default after the cure period therefor on the part of Sublandlord under this
Sublease or under the Prime Lease, and Sublandlord agrees that in such event,
Sublandlord shall pay to Subtenant the reasonable cost thereof including
reasonable expenses and attorney's fees upon written demand.
15. BINDING EFFECT, ENTIRE AGREEMENT. This Sublease shall be binding on
the parties hereto and their successors and assigns. This Sublease contains the
entire agreement of the parties with respect to the subject matter herein and
may not be modified except by instrument in writing, which is signed by both
parties.
16. BROKER. The parties warrant and represent that Xxxxx Commercial
Realty, Inc. and CB Xxxxxxx Xxxxx, Inc. (the "Brokers") are the only real estate
brokers involve in the negotiation, consummation and delivery of the Sublease.
Except for the Brokers, the parties warrant and represent that no real estate
broker, agent, salesperson or other party was involved in the negotiation,
consummation and delivery of this Sublease and should this warranty and
representation be contrary to fact, the party making such misrepresentation or
breaking such warranty shall defend, indemnify and hold the other party harmless
from and against any fees, costs, or expenses arising thereunder. Sublandlord
shall pay Brokers pursuant to the terms of a separate agreement.
17. GRAPHICS. Subtenant, at its sole cost and expense, shall be
responsible for any signage desired by Subtenant. Subtenant shall obtain Prime
Landlord's consent to any signage requested by Subtenant and Sublandlord shall
not be entitled to approve any signage desired by Subtenant. All signage of
Subtenant must be in full compliance with all laws, rules, regulations and
ordinances, must be constructed and installed in a good and workmanlike manner,
and must be removed (and all damage repaired) at the expiration or earlier
termination of the term of this Sublease if required to be removed under the
terms of the Prime Lease.
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18. APPLICABLE LAW. This Sublease shall be governed by the laws of the
State of Texas.
19. SEVERABILITY. If any term or provision of this Sublease, or the
application thereof to any person or circumstance, will to any extent be invalid
or unenforceable, the remainder of this Sublease, or the application of such
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, will not be affected thereby, and each provision of this
Sublease will be valid and will be enforceable to the extent permitted by law.
IN WITNESS WHEREOF, duly authorized representatives of the parties hereto
have executed this Sublease as of the day and year first above written.
XXXXXXX KODAK COMPANY, SUBLANDLORD DATA RETURN CORPORATION, SUBTENANT
BY: /s/ XXX X. XXXX BY: /s/ XXXXXXXX X. XXXXXXXX
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NAME: Xxx X. Xxxx NAME: Xxxxxxxx X. Xxxxxxxx
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TITLE: Director, Real Estate TITLE: President & COO
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