Exhibit 10.9
SECOND AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT ("First Amendment") is made
this 9th day of September, 2004, by and between THE REALTY ASSOCIATES FUND VI,
L.P., a Delaware limited liability partnership, successor in interest to Xxx
Xxxxx Associates ("Landlord") and MEDICAL NUTRITION USA, INC., a Delaware
corporation, formerly known as Medical Nutrition, Inc. ("Tenant").
WITNESSETH:
WHEREAS, Xxx Xxxxx Associates, Landlord's predecessor in interest, and
Tenant entered into that certain Lease Agreement dated October 4, 1984, as
amended by that certain First Amendment to Lease dated as of October 24, 1994
and that certain lease extension letter dated November 17, 1999 (collectively,
the "Lease"), pursuant to which Tenant leased that certain premises in the
building located at 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the "Building"),
said premises containing Seven Thousand Five Hundred (7,500) rentable square
feet (the "Premises"); and
WHEREAS, the Term of the Lease expires December 31, 2004; and
WHEREAS, Landlord and Tenant desire to amend the Lease to extend the
Term of the Lease and to amend certain other terms and conditions of the Lease
as herein provided.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant hereby agree to the following:
1. Recitals. The recitals set forth above are incorporated herein by this
reference with the same force and effects as if fully set forth
hereinafter.
2. Capitalized Terms. Capitalized terms not otherwise defined herein
shall have the meeting ascribed to them in the Lease. From and after
the date hereof, the Lease and his Second Amendment shall be known
collectively as the "Lease".
3. Term. Notwithstanding anything to the contrary contained in the Lease
or elsewhere, the Term of the Lease is hereby extended for a period of
five (5) years commencing on January 1, 2005 (the "Renewal Date") and
expiring December 31, 2009 (inclusively, the "Renewal Term"), unless
sooner terminated pursuant to the terms of the Lease or hereof.
4. Base Rent.
a. Notwithstanding anything to the contrary contained in the Lease,
during the Renewal Term Tenant shall pay Base Rent with respect to the
Premises at the times and in the manner set forth in Section 3 of the
Lease in accordance with the following schedule:
Period Annual Base Rent Monthly Base Rent
------ ---------------- -----------------
01/01/05 - 12/31/05 $77,625.00 $6,468.75
01/01/06 - 12/31/06 $79,953.75 $6,662.81
01/01/07 - 12/31/07 $82,352.36 $6,862.70
01/01/08 - 12/31/08 $84,822.93 $7,068.58
01/01/09 - 12/31/09 $87,367.62 $7,280.64
b. Tenant shall continue to pay all Additional Rent as and when due
under the Lease.
5. "As-Is" Condition.
a. Tenant acknowledges that all obligations of Landlord to construct
tenant improvements for the Premises pursuant to the Lease have been met.
Tenant hereby agrees to accept the Premises in its "as-is" condition
existing on the date hereof and Landlord shall have no obligation to
construct any tenant improvements to the Premises on behalf of Tenant
during the Renewal Term.
b. Notwithstanding the foregoing, Landlord shall:
(i) Replace the HVAC roof mounted unit that serves the conference room;
and
(ii) Replace the lavatory sinks and toilets (provided this does not
require reconstruction of the lavatory rooms or their finishes).
6. Notices. Landlord's address for notices set forth on the first page of
the Lease is hereby deleted.
All notices required to be sent to Landlord pursuant to Section 20 of the
Lease shall be sent to landlord at the following addresses:
Landlord: The Realty Associates Fund VI, L.P.
c/o Kwartler Associates
0 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
With a copy to: TA Associates Realty
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxxxxxxxxx X. Good
The last clause of the first paragraph of Section 20 "with copies to
Harris R. Silver, Esq., 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000"
shall be deleted.
7. Assignment and Subletting. Article 14 of the Lease is herby deleted in
its entirety and the following Article 14 is hereby substituted in
lieu thereof:
"14. ASSIGNMENT AND SUBLETTING
-------------------------
14.1 Tenant shall not voluntarily or by operation of law assign,
transfer, hypothecate, mortgage, sublet, or otherwise transfer or
encumber (hereinafter collectively "Assign") or sublet
(hereinafter "Sublet") all or any part of Tenant's interest in
this Lease or in the Premises, without Landlord's prior written
consent, which shall not be unreasonably withheld. Landlord shall
respond to Tenant's written request for consent hereunder within
thirty (30) days after Landlord's receipt of the written request
from Tenant. Any attempted Transfer without such consent shall be
void and shall constitute a material default and breach of this
Lease. Tenant's written request for Landlord's consent shall
include, and Landlord's thirty (30) day response period referred
to above shall not commence, unless and until Landlord has
received from Tenant, all of the following information in Section
14.2 or 14.3, as applicable:
14.2 Sublet: Tenant's written request for Landlord's consent to
Sublet shall include (a) a description of the business the
subtenant intends to operate on the Premises, which must be for a
use permitted by the Lease, (b) the proposed effective date of the
sublease, (c) a copy of the proposed sublease, and (d) a detailed
description of any Alterations needed to accommodate the proposed
subtenant.
14.3 Assignment : Tenant's written request for Landlord's consent
to Assign shall include all of the following: (a) financial
statements for the proposed assignee or subtenant for the past two
(2) years prepared in accordance with generally accepted
accounting principles, if available, (b) federal tax returns for
the proposed assignee for the past two (2) years, if available,
(c) a detailed description of the business the assignee or
subtenant intends to operate the Premises, (d) the proposed
effective date of the assignment or sublease, (e) a copy of the
proposed sublease or assignment which includes all of the terms
and conditions of the proposed assignment or sublease, and (f) a
detailed description of any Alterations the proposed assignee or
subtenant desires to make to the Premises.
14.4 Landlord shall not unreasonably withhold its consent to
Sublet or Assign, provided that Tenant has complied with each and
every requirement, term and condition of this Section 14. Tenant
acknowledges and agrees that each requirement, term and condition
in this Section 14 is a reasonable requirement, term or condition.
It shall be deemed reasonable for Landlord to withhold its consent
to Sublet or Assign any requirement, term or condition of this
Section 14 is not complied with or (a) the proposal would cause
Landlord to be in violation of its obligations under another lease
or agreement to which Landlord is a party; (b) in Landlord's
reasonable judgment, a proposed assignee has a smaller net worth
than Tenant had on the date this Lease was entered into with
Tenant or is not able financially to pay the rents due under this
Lease as and when they are due and payable; (c) a proposed
assignee's or subtenant's business will impose a burden on the
Project's parking facilities, Common Areas or utilities that is
substantially greater than the burden imposed by Tenant, in
Landlord's reasonable judgment; (d) the terms of a proposed
assignment or subletting will allow the proposed assignee or
subtenant to exercise a right of renewal, right of expansion,
right of first offer, right of first refusal or similar right held
by Tenant; (e) a proposed assignee refuses to enter into a written
assignment agreement, reasonably satisfactory to Landlord, which
provides that it will abide by and assume all of the terms and
conditions of this Lease for the term of any assignment and
containing such other terms and conditions as Landlord reasonably
deems necessary; (f) the use of the premises by the proposed
assignee or subtenant will not be a use permitted by this Lease:
(g) any guarantor of this Lease refuses to consent to the
assignment or to execute a written agreement reaffirming the
guaranty; (h) Tenant is in default as defined in Section 18 at the
time of the request; (i) Landlord has sued or been sued by the
proposed assignee or has otherwise been involved in a legal
dispute with the proposed assignee; (j) the assignee or subtenants
is involved in a business which is not in keeping with the
then-current standards of the Project; (k) the proposed assignee
or subtenant is an existing tenant of the Project or is a person
or entity then negotiating with Landlord for the lease of space in
the Project; or (l)the assignee or subtenant will use, store or
handle Hazardous Materials in or about the Premises of a type,
nature, quantity not acceptable to Landlord, in landlord's sole
discretion.
14.5 Landlord shall be entitled to receive from Tenant (as and
when received by Tenant) as an item of additional rent the
following amounts (hereinafter the Premium): one-half of all
amounts received by Tenant from the subtenant or assignee in
excess of the amounts payable by Tenant to Landlord hereunder. The
Premium shall be reduced by the reasonable brokerage commissions
and legal fees actually paid by Tenant in order to assign the
Lease or to sublet a portion of the Premises. "Premium" shall mean
all Base Rent, additional rent or other consideration of any type
whatsoever payable by the assignee or subtenant in excess of the
Base Rent and additional rent payable by Tenant under this Lease.
If less than all of the Premises is transferred, the Base Rent and
the additional rent shall be determined on a
per-leasable-square-foot basis. "Premium" shall also include, but
not be limited to, key money and bonus money paid by the assignee
or subtenant to Tenant in connection with such transfer, and any
payment in excess of fair-market value for services rendered by
Tenant to the assignee or subtenant or for assets, fixtures,
inventory, equipment or furniture transferred by Tenant to the
assignee or subtenant in connection with such transfer.
14.6 Notwithstanding anything to the contrary contained in this
Section 14, Landlord shall have the option, by giving written
notice to Tenant within thirty (30) days after receipt of any
request by Tenant to assign this Lease or to sublease space in the
Premises (the term of which sublease expires during the last
twelve (12) months of the Term), to terminate this Lease with
respect to said space as of the date thirty (30) days after
Landlord's election. In the event of a recapture by Landlord, if
this Lease shall be canceled with respect to less than the entire
Premises, the Base Rent, Operating Expenses and the number of
parking spaces Tenant may use shall be adjusted on the basis of
the number of rentable square feet retained by Tenant in
proportion to the number of rentable square feet contained in the
original Premises, and this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either
party, the parties shall execute written confirmation of same. If
Landlord recaptures only a portion of the Premises, it shall
construct and erect at its sole cost such partitions as may be
required to sever the space to be retained by Tenant from the
space recaptured by landlord. Landlord may, at its option, lease
any recaptured portion of the Premises to the proposed subtenant
or assignee or to any other person or entity without liability to
Tenant. Tenant shall not be entitled to any portion of the profit,
if any, Landlord may realize on account of such termination and
reletting. Tenant acknowledges that the purpose of this Section is
to enable Landlord to receive profit in form of higher rent or
other consideration to be received from an assignee or subtenant
to give Landlord the ability to meet additional space requirements
of other tenants of the Project and to permit Landlord to control
the leasing of space in the Project. Tenant acknowledges and
agrees that the requirements of this Section are commercially
reasonable and are consistent with the intentions of Landlord and
Tenant.
14.7 In the event Tenant shall request Landlord's consent to
Assign this Lease or Sublet the Premises, then Tenant shall pay
Landlord's reasonable costs and expenses incurred in connection
therewith, including, but not limited to, attorneys', architects',
accountants', engineers', or other consultants' fees.
14.8 The foregoing notwithstanding, provided Tenant is not in
default after expiration of all applicable notice and cure
periods, Tenant shall have the right, without Landlord's consent,
upon thirty (30) days advance written notice to Landlord, to
assign the Lease or sublet the whole or any part of the Premises
(a) to any entity or entities which are owned by Tenant, or which
owns Tenant, (b) in connection with the sale or transfer of
substantially all of the assets of the Tenant or the sale or
transfer of substantially all of the outstanding ownership
interests in Tenant, or (c) in connection with a merger,
consolidation or other corporate reorganization of Tenant (each of
the transactions referenced in the above subparagraphs (a), (b),
and (c) are hereinafter referred to as "Permitted Transfer," and
each surviving entity shall hereinafter be referred to as a
"Permitted Transferee"); provided, that such assignment or
sublease is subject to the following conditions:
(i) Tenant shall remain fully liable under the terms of the
Lease;
(ii) such Permitted Transfer shall be subject to all of the
terms, covenants and conditions of the Lease;
(iii) in the event the entity which constitutes Tenant does not
survive such transaction, such Permitted Transferee has a net
worth at least equal to the net worth of Tenant as of the date
of this Lease, and
(iv) such Permitted Transferee shall expressly assume the
obligations of Tenant under the Lease by a document reasonably
satisfactory to Landlord.
8. Compliance with Laws. Article 16 of the Lease is hereby modified by
adding the following new Section 16.2(iv):
(iv) "Tenant shall, at Tenant's sole expense, comply with all
requirements of the Americans With Disabilities Act ("ADA") that
relate to the Premises and with all federal, state and local
laws and regulations governing occupational safety and health."
9. Brokers. Tenants represents and warrants to Landlord that Tenant has
not had any dealings or entered into any agreements with any person,
entity, realtor, broker, agent or finder in connection with the
negotiation of this Second Amendment other than Xxxxxxxx Associates,
Inc. Tenant shall indemnify and hold Landlord harmless from and
against any loss, claim, damage, expense (including costs of suit and
reasonable attorneys' fees) or liability to any compensation,
commission or charges claimed by any other realtor, broker, agent or
finder claiming to have dealt with Tenant in connection with this
Second Amendment.
10. Reaffirmation of Terms. Except as modified herein, all of the terms,
covenants and provisions of the Lease are hereby confirmed and
ratified and shall remain unchanged and in full force and effect.
11. Representations. Tenant hereby represents and warrants to Landlord
that Tenant (i) is not in default of its obligation under the Lease
and that such Lease is valid, binding and enforceable in accordance
with its terms, (ii) has full power and authority to execute and
perform this Second Amendment, and (iii) has taken all action
necessary to authorize the execution and performance of this Second
Amendment.
12. Counterpart Copies: This Second Amendment may be executed in two or
more counterpart copies, each of which shall be deemed to be an
original and all of which counterparts shall have the same force and
effect as if the parties hereto had executed a single copy of this
Second Amendment.
13. Deleted Provision: Effective as of the date hereof, Section 51 of the
Lease is hereby deleted in its entirety.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Amendment as
of the day and year first above written.
LANDLORD
THE REALTY ASSOCIATES FUND VI, L.P.
A Delaware limited partnership
By: Realty Associates Fund VI LLC, a
Massachusetts limited liability company,
General partner
By: Realty Associates Advisors LLC, a
Delaware limited liability company,
Manager
By: Realty Associates Advisor Trusts, a
Massachusetts business trust, sole
Member
By:
----------------------------------
[Officer]
By: Realty Associates Fund VI Texas
Corporation, a Texas corporation, general
Partner
By:
----------------------------------------------
[Officer]
TENANT
MEDICAL NUTRITION USA, INC.
A Delaware corporation
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
