Exhibit 10.37
PRIME LANDLORD, TENANT AND SUBTENANT AGREEMENT
THIS PRIME LANDLORD, TENANT AND SUBTENANT AGREEMENT ("Agreement") is
entered into as of June , 2002, by and among XXXXXXX XXXXXXX, AS TRUSTEE OF
CHIZMAS REALTY TRUST, a Massachusetts nominee realty trust ("Prime Landlord"),
MOHAWK/CDT, A DIVISION OF CABLE DESIGN TECHNOLOGIES, INC., a Washington
corporation ("Tenant"), and PHARMA GROUP, INC., a Delaware corporation
("Subtenant").
Reference is made to a Lease ("Lease") dated as of January 16, 2001, by and
between Prime Landlord and Tenant, for premises ("Premises") located at 0 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx and as more particularly described in
the Lease ("Prime Landlord's Property"). Terms not otherwise defined herein
shall have the same meaning as set forth in the Lease.
Reference is further made to a certain Sublease Agreement dated as of the
date hereof ("Sublease"), with Tenant, as Sublandlord, and Subtenant as
Subtenant, which is a Sublease for the entire Premises by and between Tenant and
Subtenant.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Prime Landlord, Tenant and Subtenant agree as follows:
1. Conditioned upon and subject to the terms and provisions of this
Agreement, Prime Landlord hereby consents to the Sublease.
2. Subtenant recognizes Prime Landlord as the Landlord under the Lease.
3. Subtenant agrees that Prime Landlord is an intended third party
beneficiary of Subtenant's obligations under Paragraph 5(a) of the Sublease.
4. In the event that Tenant shall be in default under the Lease and Prime
Landlord is obligated to provide notice of such default to Tenant under the
Lease, then Prime Landlord shall also provide a copy of such notice to Subtenant
and, in such event, Subtenant shall have the right (but not the obligation) to
cure such default of Tenant within the time periods for cure of same under the
Lease, and Prime Landlord agrees to accept such cure by Subtenant.
5. Prime Landlord represents and warrants to Subtenant and Tenant that the
Lease is ratified and confirmed and remains in full force and effect against
Prime Landlord, unchanged. Prime Landlord represents and warrants to Tenant and
Subtenant that Prime Landlord is in full compliance with its obligations under
the Lease, and, to Prime Landlord's knowledge, Tenant is in full compliance with
Tenant's obligations under the Lease, that Prime Landlord and all Tenant's work,
if any, under the Lease has been fully and satisfactorily performed.
6. In the event Prime Landlord consents to an assignment of the Sublease by
Subtenant or a subleasing of any portion of the Premises by Subtenant, such
consent of Prime Landlord shall not be construed, as between Prime Landlord and
Tenant, as relieving
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Tenant from any liability or responsibility under the Lease or from
responsibility for obtaining Prime Landlord's prior written consent to any
further assignment or subleasing of the Premises, if and to the extent Tenant is
required to obtain such consent under the Lease.
7. Tenant represents and warrants to Prime Landlord that the Lease is
ratified and confirmed and remains in full force and effect against Tenant,
unchanged. Tenant represents and warrants to Prime Landlord that, to Tenant's
knowledge, Prime Landlord is in full compliance with Prime Landlord's
obligations under the Lease, that Tenant is fully satisfied with the Premises
and Prime Landlord's Property as of the date hereof and all Prime Landlord's
work to be performed as of the date hereof, if any, under the Lease has been
fully and satisfactorily performed.
8. Except as provided herein, this Consent shall not, as between Tenant and
Prime Landlord, release Tenant from any existing or future duty, obligation or
liability to Prime Landlord pursuant to the Lease, nor shall this Consent
change, modify or amend the Lease in any manner, except insofar as it
constitutes Prime Landlord's consent to the Sublease. Notwithstanding the
generality of the foregoing, this Consent expressly shall not absolve Tenant
from any requirement set forth in the Lease that Tenant obtain Prime Landlord's
prior written approval of any additional subleases, assignments or other
dispositions of its interest in the Lease or the Premises (as defined in the
Lease). In the event of Prime Landlord's acceptance from time to time of
payments of rent or other amounts from Subtenant or the performance of other
obligations of Sublandlord as Tenant under the Lease, such payment(s) and/or
performance shall be deemed on behalf and for the account of Tenant and such
acceptance shall not be deemed a waiver of Prime Landlord's right to require
future performance by Sublandlord as Tenant of Tenant's obligations under the
Lease.
9. (a) Sublandlord shall be responsible for the collection of all rent due
it from Subtenant, and, as concerns Sublandlord and Subtenant, Prime Landlord
need look only to Sublandlord as its tenant. However, in the event of Lease
Termination (as hereinafter defined) prior to the termination of the Sublease
not caused by a default or breach of Subtenant's obligations under the Sublease,
and subject to the provisions of Section 9(b) hereof, or in the event of Prime
Landlord's right to terminate Sublandlord's (and as a result Subtenant's) right
of possession to the premises which Subtenant subleases from Sublandlord
("Subleased Premises") and the interest of Sublandlord (and as a result
Subtenant) therein and such right is not caused by a default or breach of
Subtenant's obligations under the Sublease, Prime Landlord may, at its sole
discretion, but shall not be required, agree with Subtenant that Subtenant shall
assume and agree to perform Sublandlord's obligations as Tenant under the Lease
with respect to the Subleased Premises, so long as the terms of such assumption
and of the Lease are mutually acceptable to Prime Landlord and Subtenant. Such
assumption by Subtenant of the Lease with respect to the Subleased Premises
shall entitle the Subtenant to occupy the Subleased Premises leased pursuant to
the Lease, but shall not relieve Sublandlord from any liability to Prime
Landlord under the Lease.
In the event of such assumption, Prime Landlord shall not (i) be liable to
Subtenant for any act, omission or breach of the Sublease by Sublandlord, (ii)
be subject to any offsets of defenses which Subtenant might have against
Sublandlord, (iii) be bound by any rent or
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additional rent which Subtenant might have paid in advance to Sublandlord, (iv)
be bound to honor any rights of Subtenant in any security deposit made with
Sublandlord by Subtenant except to the extent Sublandlord has specifically
assigned and turned over such security deposits to Prime Landlord, or (v) be
bound by any provision of the Sublease. Furthermore, in the event of such
assumption and notwithstanding anything in this Agreement or the Lease to the
contrary, performance of Subtenant under such assumption shall constitute
performance of Sublandlord under the Lease.
Sublandlord hereby agrees that in the event of Lease Termination not caused
by a breach or default by Subtenant under the Sublease, and subject to the
provisions of Section 9(b) hereof, at Prime Landlord's request, Sublandlord
shall immediately pay or transfer to Prime Lessor any security deposits, rent or
other sums then held by Sublandlord in connection with the subleasing of the
Subleased Premises. Such security deposit may be applied by Prime Landlord
pursuant to the terms of the Lease in the event of any holding over or other
default by the Subtenant after a Lease Termination. Subtenant hereby agrees that
under no circumstances whatsoever shall Prime Landlord be held in any way
responsible or accountable for any security deposit or any sums paid by
Subtenant to Sublandlord unless and until and to the extent that Prime Landlord
has actually received such sums from Sublandlord, and Subtenant shall have no
claim to any security or other deposit made by Sublandlord under the Lease. Once
Prime Landlord receives such security deposit, Sublandlord shall be relieved of
any liability to Subtenant respecting same.
(b) "Lease Termination" means any event, which by voluntary or involuntary
act or by operation of law, causes the Lease to be terminated, expire, or be
canceled, including, but not limited to, (1) a default by Sublandlord under the
Lease or any of the terms and provisions hereof (to the extent not cured by
Sublandlord or Subtenant); (2) foreclosure proceedings brought by the holder of
any mortgage or trust deed to which the Lease is subject; (3) the termination of
Sublandlord's leasehold estate by dispossession proceeding or otherwise; and (4)
termination of the Lease in accordance with its terms.
10. In addition to Prime Landlord's rights under Section 9 hereof, in the
event Sublandlord is in default under any of the terms and provisions of the
Lease, Prime Landlord may elect to receive directly from Subtenant all sums due
or payable to Sublandlord by Subtenant pursuant to the Sublease, and upon
receipt of Prime Landlord's notice, Subtenant shall thereafter pay to Prime
Landlord any and all sums becoming due or payable under the Sublease and
Sublandlord shall receive from Prime Landlord a corresponding credit for such
sums actually received by Prime Landlord against any and all payments then owing
from Sublandlord. Neither the service of such written notice nor the receipt of
such direct payments shall cause Prime Landlord to assume any of Sublandlord's
duties, obligations and/or liabilities under the Sublease, nor shall such event
impose upon Prime Landlord the duty or obligation to honor the Sublease, nor
subsequently to accept any purported attornment by Subtenant. Sublandlord grants
Prime Landlord a security interest in all such payments due to Sublandlord from
Subtenant after delivery of such notice, which security interest Prime Landlord
may perfect by filing a UCC-1 (which Sublandlord shall sign within three (3)
days of Prime Landlord's request). Prime Landlord shall credit payments actually
received pursuant to this conditional assignment to Sublandlord's obligations
under the Lease.
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11. Subject to the terms of this section and so long as Subtenant has not
defaulted on the Sublease beyond any applicable notice and cure periods,
Subtenant shall have the right to extend its occupancy at the Premises as a
direct tenant of Prime Landlord for two (2) successive separate periods of five
(5) years each after the expiration of the Sublease Term (each such option being
herein sometimes referred to as an "Extension Option").
(A) If Subtenant elects to exercise the "First Extension Option" Subtenant
shall deliver written notice to Prime Landlord no later than twelve months
before the expiration date of the Sublease (the "Extension Notice"). Time is of
the essence to the giving of the Extension Notice and any Extension Notice shall
be irrevocable except as expressly set forth herein.
(B) Upon Subtenant's timely exercise of the First Extension Option, Prime
Landlord and Subtenant shall negotiate reasonably and in good faith to enter
into a lease in form and substance mutually acceptable to Prime Landlord and
Tenant (the "Direct Lease"), which Direct Lease shall include certain of the
following terms:
1. Base Rent. The base rent under the Direct Lease for the first year
of the five-year term subject to the First Extension Option (the
"First Extension Term") shall be the greater of (i) the base rent paid
by Sublandlord under Year 5 of the Lease, or (ii) the "Market Rent,"
which shall mean the rate per square foot of rentable area then being
paid for comparable facilities in Leominster, Massachusetts, taking
into consideration market rents, the term of the Lease, the treatment
of operating expenses, the absence of broker commissions, and the
amount or lack of a tenant improvement allowance, as the case may be.
In years 2, 3, 4 and 5 of the First Extension Term, the base rent
shall be subject to an annual consumer price index adjustment equal to
the annual percentage increase in the "Price Index" as defined in
Section 4.1(B)(i) of the Lease. If Prime Landlord and Subtenant are
unable to agree upon the base rent within sixty days of the exercise
of the option (the "Rent Negotiation Deadline"), the Market Rent shall
be determined by an appraisal process, as follows. Each party shall
choose a "Qualified Appraiser" (defined as "an independent, licensed
and accredited member of the "Association" (defined below)) who shall
determine the appropriate "Market Rent" on its behalf and submit the
same to the other Qualified Appraiser (together with the information
forming the basis for such determination) within thirty (30) days
after the Rent Negotiation Deadline (with each party paying the fee of
its own appraiser). If the two Qualified Appraisers do not agree on
the Market Rent within fifteen (15) days thereafter, then the two
Qualified Appraisers shall promptly jointly select a third Qualified
Appraiser. If the two Qualified Appraisers cannot agree on the
identify of the third Qualified Appraiser within five (5) days, then
the third Qualified Appraiser shall be selected by the most senior
officer of the Association (defined as the Leominster chapter of the
American Institute of Real Estate Appraisers or its successor, or if
there shall be no successor, a professional organization having a
function, standards and qualifications similar thereto). Within thirty
(30) days after his appointment, the third Qualified Appraiser shall
select one of the two initially submitted appraisals as the Market
Rent applicable for the First Extension Term, and such selection
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shall be binding upon the parties.
2. Direct Lease Terms. Except for Base Rent, Security Deposit and such
other matters which are set forth herein, all terms, conditions and
covenants of the Direct Lease, including, without limitation, the
Subtenant's responsibility for Additional Rent, shall be based on a
form that is substantially similar to the Lease form, but such
agreement shall not preclude Subtenant from negotiating the terms of
the Direct Lease.
3. Security Deposit. Subtenant shall deposit with Prime Landlord a
$225,000 Security Deposit contemporaneous with the commencement of the
Direct Lease, which Security Deposit shall be held by Prime Landlord
and may be refunded to Subtenant after the expiration of the Direct
Lease pursuant to the provisions contained therein.
(C) If Subtenant elects to exercise the "Second Extension Option" Subtenant
shall deliver written notice to Prime Landlord no later than twelve months
before the expiration date of the First Extension Term. The terms and provisions
governing the five-year term subject to the Second Extension Option (the "Second
Extension Term") shall be identical to the terms and provisions governing the
First Extension Term, except that the base rent for the first year of the Second
Extension Term shall be the greater of (i) the base rent paid by Subtenant under
Year 5 of the First Extension Term of the Direct Lease, or (ii) the "Market
Rent." In years 2, 3, 4 and 5 of the Second Extension Term, the base rent shall
be subject to an annual consumer price index adjustment equal to the annual
percentage increase in the "Price Index" as defined in Section 4.1(B)(i) of the
Lease. If Prime Landlord and Subtenant are unable to agree upon the Market Rent
on or before one hundred eighty (180) days prior to the expiration date of the
First Extension Term, the Market Rent shall be determined by an appraisal
process, as follows. Each party shall choose a "Qualified Appraiser" (defined as
"an independent, licensed and accredited member of the `Association' " (defined
below) who shall determine the appropriate "Market Rent" on its behalf and
submit the same to the other Qualified Appraiser (together with the information
forming the basis for such determination) within thirty (30) days (with each
party paying the fee of its own appraiser). If the two Qualified Appraisers do
not agree on the Market Rent within fifteen (15) days thereafter, then the two
Qualified Appraisers shall promptly jointly select a third Qualified Appraiser.
If the two Qualified Appraisers cannot agree on the identity of the third
Qualified Appraiser within five (5) days, then the third Qualified Appraiser
shall be selected by the most senior officer of the Association (defined as the
Leominster chapter of the American Institute of Real Estate Appraisers or its
successor, or if there shall be no successor, a professional organization having
a function, standards and qualifications similar thereto). Within thirty (30)
days after his appointment, the third Qualified Appraiser shall select one of
the two initially submitted appraisals as the Market Rent applicable for the
Second Extension Term, and such selection shall be binding upon the parties.
Notwithstanding the foregoing, if the base rent for the Second Extension Term is
unacceptable to Subtenant, Subtenant may withdraw its exercise of the Second
Extension Option by delivering to Prime Landlord notice of its withdrawal within
ten (10) days of the third Qualified Appraiser's determination of the "Market
Rent," in which event Subtenant's occupancy shall terminate upon the expiration
of the First Extension Term.
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12. Notwithstanding anything in the Lease or the Sublease to the contrary,
Prime Landlord and Subtenant hereby waive and shall cause their respective
insurance carriers to waive any and all rights of recovery, claim, action or
causes of action against the other and their respective trustees, principals,
beneficiaries, partners, officers, directors, agents, and employees, for any
loss or damage that may occur to Prime Landlord or Subtenant or any party
claiming by, through or under Prime Landlord or Subtenant, as the case may be,
with respect to Subtenant's Property, the Building, the Premises, any additions
or improvements to the Building or Premises, or any contents thereof, including
all rights of recovery, claims, actions or causes of action arising out of the
negligence of Prime Landlord or any Prime Landlord related parties or the
negligence of Subtenant or any Subtenant related parties, which loss or damage
is (or would have been, had the insurance required by the Lease or this Sublease
been carried) covered by insurance.
13. Subtenant hereby acknowledges that it has read and has knowledge of all
of the terms, provisions, rules and regulations of the Lease and agrees not to
do or omit to do anything which would cause Sublandlord to be in breach of the
Lease. Any such act or omission also shall constitute a breach of the Lease and
this Consent shall entitle Prime Landlord to recover any damage, loss, cost, or
expense which it thereby suffers, from Sublandlord and/or Subtenant.
14. Sublandlord and Subtenant agree that Prime Landlord is not responsible
for the payment of any commission or fees in connection with the Sublease and
they each jointly and severally agree to indemnify and hold harmless Prime
Landlord from and against any claims, liabilities, losses or expenses, including
reasonable attorneys' fees, incurred by Prime Landlord in connection with any
claims for commissions or fees by any broker or agent in connection with the
Sublease. Sublandlord shall pay to Prime Landlord, contemporaneous with the
execution of this agreement Prime Landlord's invoice therefore and as required
under the Lease, Prime Landlord's out-of pocket costs and expenses, including,
without limitation reasonable attorney's fees, incurred in connection with the
review of the Sublease and the negotiation and preparation of this agreement.
15. In the event of any litigation between the parties hereto with respect
to the subject matter hereof, the unsuccessful party agrees to pay the
successful party all reasonable costs, expenses and attorneys' fees incurred
therein by the successful party, which amounts may be included as a part of a
judgment rendered therein.
16. The parties acknowledge that the Sublease constitutes the entire
agreement between Sublandlord and Subtenant with respect to the subject matter
thereof insofar as Prime Landlord may be concerned, and that no amendment,
termination, modification or change therein will be binding upon Prime Landlord
unless Prime Landlord shall have given its prior written consent hereto.
17. Each of Sublandlord and Subtenant shall, simultaneously upon the
mailing of any default notice to the other under the Sublease, use good faith
efforts to mail a copy of the same to Prime Landlord in accordance with the
provisions of the Lease, but failure to do so shall
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not constitute a default of any party hereunder or under the Lease and a party
failing to provide such notice shall not incur any liability as a result
thereof.
18. This Agreement shall be governed and construed in accordance with the
laws of the Commonwealth of Massachusetts.
19. This Agreement may be signed in multiple originals and/or may be
separately signed and assembled and contain the signatures of all the parties,
with each counterpart constituting an original document. Tenant confirms to
Prime Landlord that notices to Tenant shall be sent in the manner provided for
in the Lease and addressed to Tenant at:
Mohawk/CDT
0 Xxxxxx Xxxxx
Xxxxxxxxxx , XX 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and:
x/x Xxxxx Xxxxxx Xxxxxxxxxxxx
Xxxxxx Xxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Subtenant confirms to Prime Landlord that notices to Subtenant shall be
sent in the manner provided for in the Lease addressed as follows:
Pharma Group, Inc.
0 Xxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
and
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DT Industries
000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
20. Subtenant has full power and authority under its organizational
documents to enter into and carry out the terms and provisions of this Agreement
and to execute and deliver this Agreement. All actions necessary to confer such
power and authority upon the persons executing this Agreement on behalf of
Subtenant have been taken.
21. Tenant has full power and authority under its organizational documents
to enter into and carry out the terms and provisions of this Agreement and to
execute and deliver this Agreement. All actions necessary to confer such power
and authority upon the persons executing this Agreement on behalf of Tenant have
been taken.
22. Prime Landlord has full power and authority under its organizational
documents to enter into and carry out the terms and provisions of this Agreement
and to execute and deliver this Agreement. All actions necessary to confer such
power and authority upon the persons executing this Agreement on behalf of Prime
Landlord have been taken.
23. Each party agrees to perform, execute and deliver, on and after the
date hereof, such further actions and documents as may be reasonably necessary
or requested to more fully effectuate the purposes, terms and intent of this
Agreement provided that they shall incur no additional liability or obligations
in connection therewith.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS
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EXECUTED as a sealed instrument as of the date first written above.
TENANT:
MOHAWK/CDT, a division of CABLE DESIGN TECHNOLOGIES, INC.
By: /s/ Authorized Signatory
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Print Name:
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Its:
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SUBTENANT:
PHARMA GROUP, INC.
By: /s/ Authorized Signatory
--------------------------------------
Print Name:
------------------------------
Its:
-------------------------------------
PRIME LANDLORD:
CHIZMAS REALTY TRUST
By: /s/ Xxxxxxx Xxxxxxx
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Print Name: Xxxxxxx Xxxxxxx
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Its: Trustee
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