Exhibit 10.22(b)
AMENDMENT NO. 2 TO LEASE AGREEMENT
THIS AMENDMENT NO. 2 TO LEASE AGREEMENT is made this 22 day of April,
1999, by and between CHIPPEWA LIMITED PARTNERSHIP, a Maryland limited
partnership, hereinafter called "Landlord," and OSICOM TECHNOLOGIES, INC., a
Delaware corporation f/k/a CASE/DATAEL, INC.), hereinafter called "Tenant."
WHEREAS Landlord and Tenant are parties to a Lease Agreement dated October
4, 1989, as modified by First Amendment of Lease dated October 19, 1994 (the
"Lease"); and
WHEREAS Tenant has requested Landlord to make certain modifications to the
term of the Lease; and
WHEREAS Landlord is willing to make the modifications to the Lease Tenant
has requested, upon certain terms and conditions, all as more fully described
herein below.
WITNESSETH, in consideration of the premises and the mutual covenants
herein contained, the Lease is hereby amended as follows:
1. Effective June 1, 1999 Tenant shall vacate [make best efforts to
vacate] and shall deliver to Landlord,in the condition the Premises are to be
delivered at the conclusion of the term, that portion of the Premises consisting
of 34,956 square feet, as shown on Exhibit A attached hereto and hereby made a
part hereof, and such space shall no longer be leased from Landlord to Tenant,
shall no longer be a portion of the Premises and Tenant shall and hereby does,
effective such date, relinquish any right or interest to such space. Effective
[June 1, 1999] the "Premises" shall mean the 37,384 square feet of space shown
on Exhibit A. The foregoing notwithstanding, any obligations of Tenant relating
to such space, that accrued prior to [June 1, 1999] shall remain in effect.
2. Effective June 1, 1999 the term of the Lease shall be for a period
of five (5) years and five (5) months from June 1, 1999. Accordingly, the
term of the Lease shall expire and the Termination Date shall be October 31,
2004.
3. Landlord shall install the tenant improvements set forth in the Tenant
Improvement Specifications attached hereto as Exhibit A-1 and the Floor Plan
attached hereto as Exhibit A-2. Landlord, based upon its discussions with
Tenant, has estimated that the total costs of the tenant improvements (such
costs to include all amounts paid to contractors, subcontractors, material
suppliers, design or other professionals, permit fees, and etc.) is One Hundred
Eighty-five Thousand Dollars ($185,000.00) (the "Tenant Improvement Allowance").
Any increase in the amount of such total costs, over the Tenant Improvement
Allowance, including, but not limited to, increases resulting from additions to
or modifications of the attached exhibits, shall be Tenant's obligation and
shall be paid for by Tenant within ten (10) days after demand. Landlord
Estimates that the tenant improvements will be substantially completed within
sixty (60) days after the later of (i) the date of this Amendment, or (ii) the
date of full execution of the lease with Earthshell Corporation, as described in
paragraph 10 below. Notwithstanding the foregoing, Landlord shall have no
liability to Tenant if the tenant improvements are not completed by such date
and, in such event, Tenant shall be required to perform in accordance with the
terms of the Lease and this Amendment, and Landlord shall continue to utilize
commercially reasonable efforts to complete the tenant improvements as promptly
as reasonably possible. Tenant shall cooperate with Landlord in Landlord's
efforts to construct the tenant improvements and shall [make reasonable efforts
to] remove all of its goods and materials from the portions of the Premises upon
which Landlord's contractors are working, so as to provide a safe and clear
working environment for Landlord's contractors. Landlord agrees that it will
provide a copy of all costs associated with the tenant improvements to Tenant
within twenty (20) days after full execution of this Amendment. Landlord agrees
that the carpet it will install, as a part of the tenant improvements, will be a
commercial grade carpet that under normal wear and tear with proper maintenance
will have a useful life of not less than five and one-half (5%) years.
4. Until May 30, 1999 Tenant shall continue to pay Basic Rental in
accordance with the terms of the Lease. Beginning June 1, 1999 (if Tenant
complies with paragraph 1 above), the Basic Rental payable with respect to
the Lease and the Premises shall be changed and, beginning on such date,
Tenant will pay to Landlord at % Xxxxx Xxxx Management Co., Inc., Xxxxx 000,
00 Xxxx'x Xxx, Xxx Xxxxxx, Xxxxxxxx 00000, or at such other place as Landlord
shall from time to time direct, the Basic Rental in the amounts set forth
below. The Basic Rental shall be payable in equal monthly installments, in
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advance and without demand, on the first day of each and every month during the
term of the Lease, commencing on June 1, 1999. Basic Rental shall be as follows:
Term Annual Basic Rental Monthly Basic Rental
June 1, 1999 to
April 30, 2000 $371,970.80 $30,997.57
May 1, 2000 to
April 30, 2001 $379,410.21 $31,617.52
May 1, 2001 to
April 30, 2002 $386,998.41 $32,249.87
May 1, 2002 to
April 30, 2003 $394,738.38 $32,894.86
May 1, 2003 to
April 30, 2004 $402,633.14 $33,552.76
May 1, 2004 to
October 31, 2004 $410,685.80 $34,223.87
Notwithstanding anything to the contrary contained in this paragraph
4, the foregoing rent schedule is based upon the assumption that the actual
total costs of the tenant improvements (the "Actual Costs") are at least one
Hundred Eighty-five Thousand Dollars ($185,000.00). In the event that the Actual
Costs is less than the Tenant Improvement Allowance, then the amount of Basic
Rental shall be recalculated and shall be reduced by an amount equal to that
obtained by amortizing the difference between the Tenant Improvement Allowance
and the Actual Costs on a monthly basis over a ten (10) year period at an
interest rate of ten percent (10%). For instance, if the Actual Costs are One
Hundred Thirty-five Thousand Dollars ($135,000.00), then the amount of Basic
Rental payable for the period May 1, 1999 to April 30, 2000 would be Three
Hundred Sixty-four Thousand Forty-one and 68/100 Dollars ($364,041.68) and the
monthly Basic Rental payment for such period would be Thirty Thousand Three
Hundred Thirty-six and 81/100 Dollars ($30,336.81), and such amount would be
increased at the rate of two percent (2%) per year for each of the remaining
lease years during the term.
5. The current base year for all purposes of the Lease, including, but not
limited to, taxes(in accordance with paragraph 6 of the Lease), fire and
extended coverage and rental insurance (in accordance with paragraph 7 of the
Lease), and common area maintenance charges (in accordance with paragraph 8 of
the Lease) will not change and will remain the same as it was when the Lease was
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originally executed on October 4, 1989. Tenant's proportionate share, however,
shall (if Tenant is in compliance with paragraph 1 above) change effective June
1, 1999 and shall be reduced from seventy-four and fifty-eight one hundredths
percent (74.58%) to thirty-eight and fifty-four one hundredths percent (38.54%).
6. Paragraph 4 of the Lease is deleted in its entirety and is replaced
with the following:
Late Payment:
In the event that any payment required by Tenant under the
provisions of this Lease shall not be paid when due, Tenant shall,
upon demand, pay to Landlord (i) a late charge equal to the maximum
late charge contained in or mandated by the loan documents
evidencing or securing any first lien affecting the improvements
from time to time, and (ii)interest on such payment from the date
when due until paid at the rate of eighteen percent (18%) per annum.
The late charges imposed under this paragraph shall be deemed "rent"
for all purposes under this Lease, are not penalties and have been
agreed to by Landlord and Tenant as necessary to compensate Landlord
for its additional costs associated with late payment.
7. Landlord is currently in possession of a security deposit under the
Lease in the amount of Forty-eight Thousand Two Hundred Twenty-eight Dollars
($48,228. 00). Effective June 1, 1999, Landlord, provided Tenant is not in
default, will credit Seventeen Thousand Two Hundred Thirty and 43/100 Dollars
($17,230.43) against the Basic Rental payment due on June 1, 1999. The balance
of the amount now being held by Landlord, Thirty Thousand Nine Hundred
Ninety-seven and 57/100 Dollars ($30,997.57), shall continue to be held by
Landlord as a security deposit, which sum shall be held without payment of
interest as security for the performance by Tenant of its obligations under the
Lease. Landlord is authorized to deposit those funds in a non-interest bearing
account commingled with Landlord's general funds or otherwise, and Landlord
shall not be responsible for the solvency of the depository so long as it is
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insured by the Federal Deposit Insurance Corporation or similar insurer. If
Tenant shall perform all such obligations, said security deposit shall be
refunded to Tenant, without interest, within thirty (30) days after termination
of the Lease. If Tenant shall default in any obligation, Landlord shall be
entitled to apply any or all of said security deposit toward Landlord's damages
as determined by Landlord, and Tenant shall, within five (5) days after notice
thereof, deposit with Landlord an amount sufficient to restore said security
deposit to its original amount, which amount shall constitute "rent" under this
Lease.
8. Paragraphs 6, 8 and 10 of the October 19, 1994 First Amendment to
Lease, the Rider #2 to Lease Agreement Option to Renew and the Rider #3 to Lease
Agreement Rights of Expansion and any other rights of renewal, expansion,
termination, first refusal or similar rights contained in the Lease are all
hereby deleted from the Lease and declared to be null and void and of no force
or effect. The following renewal right shall be the only right of renewal of
Tenant under or in connection with the Lease:
Tenant shall have the Option to Renew the Lease for one (1)
additional five (5) year term upon giving written notice of intention to renew
to Landlord not less than one hundred eighty (180) days prior to the expiration
of the term of the Lease, as described in paragraph 2 above. Any such written
notice must advise Landlord of Landlord's obligation, described below in this
paragraph 8, to make an initial determination of the "Market Rate" for the
renewal term. All terms and conditions of the Lease shall remain in full force
and effect during the renewal term, except that there shall be no further right
of renewal and the Basic Rental for the renewal term shall be the "Market Rate,"
as defined below, effective the first day of the renewal term.
The Option to Renew granted to Tenant is personal to Tenant and may
not be exercised or be assigned, voluntarily or otherwise, by or to any person
or entity other than Tenant without the prior written consent of Landlord.
Additionally, at Landlord's option, the Option to Renew shall be null and void
if, either at the time Tenant exercises such option or at the time such renewal
term is to commence, Tenant is in default under any provision of the Lease.
The following procedure shall be used to determine the Market Rate,
for the renewal term. Not less than one hundred fifty (150) days prior to the
commencement of the renewal term, Landlord shall send to Tenant a written notice
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specifying its determination of the Market Rate. Within twenty (20) days after
receipt of such notice from Landlord, Tenant shall send Landlord a written
notice of Tenant's acceptance or challenge of Landlord's determination of such
Market Rate, provided, however, that in the event that Tenant fails to respond
within such twenty (20) day period, Tenant shall be deemed to have accepted
Landlord's determination of the Market Rate.
In the event that Tenant challenges Landlord' s determination of the
Market Rate and Landlord and Tenant are not able to agree on such Market Rate
within fifteen (15) days (hereinafter referred to as the "Negotiation Period")
after Landlord receives Tenant's initial rejection of Landlord's determination
of such Market Rate, then Landlord and Tenant shall each, within ten (10) days
after the expiration of the Negotiation Period, select an appraiser, each of
whom shall be an MAI-certified real estate appraiser with at least five (5)
years, experience in the Columbia, Maryland market who shall determine the
Market Rate in accordance with this paragraph. The appraisers shall be
instructed to complete the appraisal procedure independently and to submit their
written determinations to Landlord and Tenant within thirty (30) days after
their appointment.
In the event that the higher determination of the Market Rate
submitted by one of the appraisers is equal to or less than one hundred fifteen
percent (115%) of the determination of the Market Rate submitted by the other
appraiser, the Market Rate shall be the average of such determinations. If the
determination of the Market Rate submitted by one of the appraisers is greater
than one hundred fifteen percent (115%) of the determination of the Market Rate
submitted by the other appraiser, the appraisers shall, within five (5) days of
notice from either Landlord or Tenant, appoint a third appraiser with similar
qualifications to make a determination of the Market Rate. The third appraiser
shall be instructed to complete the appraisal procedure and to submit a written
determination of the Market Rate to Landlord and Tenant within thirty (30) days
after such appraiser's appointment.
The determination which is neither the highest nor the lowest of the
three determinations shall be binding upon Landlord and Tenant as the Market
Rate unless two determinations are the same, in which event the Market Rate
shall be such amount. Landlord and Tenant shall each bear the costs of their
respective appraisers. The expenses of the third appraiser shall be borne
one-half (1/2) by Landlord and one-half (1/2) by Tenant. "Market Rate" shall
mean
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what a Landlord under no compulsion to lease the Premises and a Tenant under no
compulsion to lease the Premises would determine as the Basic Rental, given the
other provisions of the Lease which remain applicable to the parties.
Notwithstanding anything to the contrary contained in this paragraph 8, in no
event shall the Basic Rental for the renewal term be less than the Basic Rental
in effect at the end of the last year of the term of the Lease. In the event the
Market Rate has not been determined by the commencement of the renewal term, the
Tenant shall pay Basic Rental equal to one hundred twenty percent (120%) of the
Basic Rental in effect at the end of the last year of the term of the Lease,
until the Market Rate is determined and promptly after such determination, the
parties shall make an appropriate adjustment to reconcile any overpayments or
under payments of Basic Rental made prior to the determination of the Market
Rate.
9. Tenant shall have an option to terminate the Lease with respect to that
portion of the Premises, consisting of 11,650 square feet, as shown on Exhibit A
(the "Released Space"). The option to terminate the Lease as to the Released
Space shall be effective, if at all, on April 30, 2003 and shall be effective
only if Tenant delivers written notice of termination to Landlord, which notice
must be given on or before October 31, 2002 and Tenant must deliver with such
notice a cashier or certified check payable to Landlord in an amount (the
"Termination Fee") equal to three (3) times the monthly Basic Rental which would
have been due for the month of April 2003, had Tenant not exercised such
termination option. (For instance, if the Basic Rental due for the month of
April 2003 were $32,894.86, the Termination Fee would be $98,684.58.) The
Termination Fee shall be non-refundable and Landlord shall be entitled to keep
the full amount of the Termination Fee, regardless of whether or not Landlord
re-leases the Released Space or any parts thereof. Any purported exercise of
Tenant's option to terminate which does not strictly comply with the terms set
forth above shall, at Landlord's election, be ineffective.
If Tenant effectively exercises its option to terminate the Lease as to
the Released Space, then, effective May 1, 2003, (i) the Released Space shall no
longer be leased from Landlord to Tenant, shall no longer be a portion of the
Premises and Tenant shall have relinquished any right or interest to such space,
(ii) Tenant shall vacate the Released Space and deliver it to Landlord in the
condition the Premises are to be delivered at the conclusion of the term, and
(iii) there will be a pro rata downward adjustment in the amount of Basic Rental
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to be paid for the balance of the Lease term, as well as a pro rata downward
adjustment in the amount of Tenant's proportionate share for all purposes of the
Lease, including those specifically mentioned in paragraph 5 above. The
foregoing notwithstanding, any obligations of Tenant relating to such space,
that accrued prior to May 1, 2003, shall remain in effect.
The option to terminate granted to Tenant is personal to Tenant and may
not be exercised or be assigned, voluntarily or otherwise, by or to any person
or entity other than Tenant without the prior written consent of Landlord.
Additionally, at Landlord's option, the option to terminate shall be null and
void if, either at the time Tenant exercises such option or at the time such
termination is to become effective, Tenant is in default under any provision of
the Lease.
10. Notwithstanding anything to the contrary contained in this Amendment,
this Amendment and Landlord's obligations hereunder shall be contingent upon
Landlord having obtained a fully executed lease for not less than 34,956 square
feet of space within the Improvements with Earthshell Corporation, a Delaware
corporation ("Earthshell"), which lease shall be satisfactory to Landlord in its
sole and absolute discretion in all respects. In the event Landlord fails to
obtain such a lease within fifteen (15) days after the execution of this
Amendment, then, Landlord shall have the right, at any time within fifteen (15)
days after such date, by written notice to Tenant, to declare this Amendment
null and void, in which event this Amendment shall be and become null and void
and the rights and obligations with respect to the parties shall be determined
by the Lease, as if this Amendment had never been executed.
11. In the event and only in the event that this Amendment is fully
executed and delivered and becomes effective (i.e., is not terminated pursuant
to paragraph 9 above), Landlord agrees to pay Xxxx Commercial LLC (the "Broker")
a leasing commission on account of this Amendment in the amount specified in a
separate written agreement between Landlord and the Broker. Tenant represents
and warrants to Landlord that it has not dealt with any other realtor, broker or
person that might claim a commission or fee in connection with this Amendment
other than the Broker and shall indemnify, defend and hold harmless Landlord
from and against any claim, loss, cost, damage or expense (including attorneys'
fees) incurred if such representation or warranty shall not be true and correct.
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12. Tenant represents and warrants to Landlord that Osicom Technologies,
Inc., a Delaware corporation, is the same entity as Case/Datael, Inc. , a
Delaware corporation, but merely reflects a name change, and that this Amendment
has been duly authorized by all necessary corporate action of Tenant and is the
valid, binding and enforceable act of Tenant.
13. By its execution of this Amendment, Tenant hereby certifies and
represents to Landlord that Landlord is in compliance with all of the terms,
covenants and conditions of the Lease and Tenant has no claim or cause of action
against or with respect to Landlord or its agents, employees or contractors
arising out of or in any way connected with the Lease or the use of the
Premises.
14. Capitalized terms not defined in this Amendment shall have the
meanings ascribed to those terms in the Lease.
15. Except as set forth herein, the Lease remains in full force and effect
and unmodified.
16. Time is of the essence of all provisions of this Amendment and remains
of the essence of all provisions of the Lease.
17. The provisions of this Amendment shall bind and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed under seal this
Amendment on the day and year first written above.
WITNESS/ATTEST: CHIPPEWA LIMITED PARTNERSHIP
By: Emory Holdings II Limited
Partnership, general partner
By: /s/ R. Xxxxxxx Xxxxx (SEAL)
------------------------ -----------------------
R. Xxxxxxx Xxxxx
General Partner
OSICOM TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxxxx (SEAL)
------------------------ ---------------------------
Xxxxxxx Xxxxxxxx
VP Finance & Operations
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[18. Remaining tenant improvement allowance from October 19, 1999 ammounts shall
be credited to Tenant.]
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